Home prices in key areas across the country slid in Q3 2018 on an annual basis, according to latest reading of the PropertyGuru Market Index (PMI).
In particular, Selangor recorded the highest drop in residential prices at 2.4 percent, followed by Johor (2.3 percent), Penang (0.7 percent) and Kuala Lumpur at 0.5 percent. Similarly, home prices in other states were on the downtrend.
The PMI is based on the asking price of more than 250,000 homes listed on our website.
Overall, asking prices of property developers advertising units on PropertyGuru and asking prices of homeowners with units listed on the website fell 2.5 percent year-on-year in Q3 2018.
PropertyGuru Malaysia Country Manager Sheldon Fernandez attributed the decline to a supply glut of residential properties, with sellers continuing to offer discounts to attract buyers.
Meanwhile, former Bank Negara Malaysia governor Dr Zeti Akhtar Aziz thinks the oversupply of residential properties will lead to a correction in prices amidst a weaker demand, reported The Edge.
“As you know economics, it’s based on supply and demand. When there’s excess supply and demand softens, what has to adjust? Prices. Prices have to adjust. Therefore, that is something we look forward to as this is for the benefit of the consumers and households.”
Zeti, who is currently the Chairman of Sime Darby Property, said this in response to Finance Minister Lim Guan Eng’s statement that prices of new launches and yet-to-be completed homes could decline by up to 10 percent as building services and construction material won’t be taxed under the sales and services tax (SST).
However, IOI Properties Group CEO Lee Yeow Seng thinks that home prices are unlikely to fall, given rising labour and material costs.
“It is also not good for house buyers, especially those who committed earlier on (because) if prices fall, valuation of their properties will fall too. We think it’s healthier for our new launches to have a price increase, instead of a drop in selling price.”
But Finance Minister Lim Guan Eng warned that if developers don’t reduce their home prices despite the SST exemption, then the federal government will remove the SST exemption.
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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