With the push by developers for more sales and the pick-up in property loans, market experts are cautiously optimistic of the local property market for the rest of the year, reported The Star.
Notably, the amount of loan applications in the first three months of 2017 increased by around 19 percent from last year, said Datuk Siders Sittampalam, managing director of property consultancy PPC International.
“This increase indicates a growth in the market in the first quarter of 2017. However, it cannot be concluded at this stage that there is a growth trend in the residential market for 2017.”
Notably, the Malaysian residential property market registered a decline in transaction value and volume by 10.7 percent and 13.9 percent respectively in 2016 from the previous year, revealed Sider.
Meanwhile, Datuk Paul Khong, managing director at Savills Malaysia, said property developers have been pushing for more sales, with the implementation of competitive-cum-innovative marketing and financing packages.
“Many buyers are still keen on the primary market, as the new builds attract low up-front deposits with a break before the bank repayments begin. More freebies are also expected in the buyers’ market now,” he said.
“Better value for money and more affordable range products are now offered for sale and buyers are also spoilt for choice.”
Khong noted that the secondary market continued to be sluggish, with loan financing remaining a challenge for buyers.
“We have seen lower asking prices, especially in the mid-high and high segments, and many property offers for sale are getting very attractive with more bargains surfacing regularly,” he added.
But while the residential sector has registered a pick up in demand, Previn Singhe, chief executive officer of Zerin Properties believe that prices will remain flat.
“Commercial properties, vis-a-vis serviced apartments and retail units such as office rentals, will hold. Older buildings will feel the pressure. Retail malls, if they are not managed well, will definitely see rentals drop.”
The Malaysian Retail Chain Association earlier said it is expecting retail sales to increase by around 4.5 percent, driven by Malaysia’s tourism industry.
Siders explained that there is a correlation between the growth in the property market and the economy.
“Since the property market works within the framework of the economy, it is pertinent to examine the economic status of the nation,” he said.
“With economic factors such as the crude oil price and currency levels improving, the geo-political issues maybe of some concern for 2017. However, key drivers of the economy would be the mega projects such as the HSR, MRT and LRT along with new highways which may contribute some positive sentiments to the economy.”
Generally, the property market is a function of supply and demand, market sentiment and economic factors, he added.
With this, Siders expect the property market to be flattish in 2017, with the primary market witnessing a decline in volume while the secondary market dominates transactions.
Image sourced from The Star