Some experts revealed that it’s currently better to buy resale properties than new ones, given that Malaysia’s housing market is expected to remain sluggish this year, reported the Malay Mail Online.
“There is a strong growth in the secondary market. Perhaps this is the area where there can be competition from the developers,” said Foo Gee Jen, President of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the private sector.
He is among the panellists at 10th Malaysian Property Summit who revealed that resale houses might provide better value to buyers in light of the declining transaction prices and volume.
“We have alternative rather than buying, getting freebies from developers. We have options to look at the secondary and options market to give you more on actual value, rather than the price consideration,” Foo noted.
The “freebies” refer to incentives like zero legal fees and stamp duty. Developers may even give out additional services and household items like furniture or appliances.
According to Dr Rahah Ismail, Director-General of the Finance Ministry’s Valuation and Property Services department, the resale market presently accounts for 82 percent of the total deals, with 69.6 percent of the transactions in this particular segment comprising houses valued at up to RM300,000.
“As shown by the performance of the secondary market, the interest to buy property is still strong. The primary market has to compete with the secondary market in terms of the right pricing.”
Moreover, Rahah is advising home builders to look into their current unit prices, given that banks are rejecting more housing loan applications.
“One thing that is of great concern when you look at the loans applied and approved, it has dropped further to 40 percent,” she said, noting that the loan approval rate has fallen from 50.3 percent in 2015 to 41.8 percent in 2016.
“I would like to urge property developers when you price the property, I think you should exclude all freebies from the price as it would affect the eligibility of the house buyers.”
Furthermore, nearly all Malaysian states saw a drop in market activity, with Putrajaya most affected. Only Kedah and Kelantan recorded positive growth thanks to the sale of agricultural land.
Overall, the number of property sales in Malaysia decreased by 11.9 percent in 2016 on an annual basis, while the total value of the deals slumped by 16.4 percent, Rahah noted. Despite the lacklustre figures, developers are still hesitant of slashing their prices.
Radin Ghazali, Content Writer at PropertyGuru, edited this story. To contact her about this or other stories email firstname.lastname@example.org