Two other experts have come forward to refute chartered property surveyor Ernest Cheong’s forecast that Malaysia’s real estate sector will suffer a “terrible hit” next year.
On Tuesday (14 November), the veteran with more than 40 years of experience in the property industry said that 2018 is expected to be a difficult year for the sector as home builders are struggling to sell houses to cash-strapped buyers.
This is after the Finance Ministry’s Valuation and Property Services Department revealed that the total number of unsold completed houses in Malaysia surged 40 percent year-on-year to 20,807 units collectively worth RM12.26 billion in 1H 2017.
In addition, Deputy Finance Minister Lee Chee Leong noted that homes costing over RM500,000 accounted for most of the unsold residential properties.
However, Henry Butcher Malaysia’s COO Tang Chee Meng argued that the “facts and figures” indicate a less negative outlook. “So for anyone to say that the market will crash next year is a bit too pessimistic.”
He admits that the country’s property market has indeed cooled and there is a high possibility that the volume of unsold houses could further increase next year. But Tang noted that units priced under RM500,000 and some pricier homes in popular locations are still selling well.
Another positive factor is that Malaysia’s Gross Domestic Product (GDP) is forecasted to expand between five percent and 5.5 percent in 2018. This is better than a couple of years ago when thousands of people lost their jobs in the sectors of aviation and finance as well as oil and gas.
Moreover, there was no spike in the number of repossessed properties placed on the auction block, nor a sharp rise in nonperforming loans (NPLs)
“NPLs will go up only if borrowers are facing financial difficulties in servicing their loans and this will only happen if their businesses go bust or if they lose their jobs.”
But based on the latest economic statistics, the country’s employment rate and the business sector’s prospects points to a less negative sentiment, he noted.
More home builders have also shifted their focus on the affordable housing segment, which is expected to remain vibrant in 2018, and this could help these companies prevail over the currently sluggish property market.
Likewise, the Penang branch of Real Estate and Housing Developers’ Association (REHDA) think that a real estate crash is unlikely, with its Chairman Jerry Chan noting that Malaysia’s exports are high and there are no mass retrenchments.
Looking ahead, Henry Butcher’s Tang advised home buyers to delay their purchase until the next General Election in mid-2018 is concluded.
Image sourced from FMT.
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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