Despite the drop in the number of property transactions and value, National Property Information (NAPIC) director Badrul Hisham Awang remains bullish of the property market’s prospect, expecting it to improve by 2H 2018 or 1H 2019, reported The Edge.
Property transactions and value dropped by 2.4 percent and 0.1 percent in 1H 2018 to 149,889 and RM67.74 billion, respectively.
Badrul attributed the decline to factors like the festivities period in the first quarter of 2018 and the subsequent election period, which saw buyers taking on a wait-and-see stance.
He noted that more sales were recorded after the election period, and while “we have not come up with the Q3 2018 report, we saw that transactions increased”.
“There will not be a huge decline or increase in 2H 2018 [in terms of volume and value], just marginal ones [which will hover less than one percent],” explained Badrul.
When asked on whether the current property overhang, which has reached an all-time high of 29,227 units worth RM17.2 billion in 1H 2018, would continue, Badrul said it is hard to say given that the overhang units could be absorbed in the next nine months depending on the economic environment and market sentiments.
Meanwhile, occupancy rate in the office sector stood at 82.8 percent, while that in the retail sector at 79.9 percent. Existing office space stood at 21.62 million sq m (from 2,502 buildings) as at end-June 2018, incoming supply at 2.48 million sq m (68 buildings) and planned supply at 0.78 million sq m (30 buildings).
Commenting on the office space oversupply, Badrul said although office buildings retain their property type, their usage can be changed for other purposes like housing private colleges and others.
“Nowadays, businesses have changed. There are many online businesses where you can work from home and you don’t need an office space. Orders are being made from the customers to the vendor and the vendor places the order with the manufacturer. The goods are delivered directly to the consumer so you don’t even need storage space to keep the stock,” he explained.
Image sourced from EdgeProp
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