All charts were provided by Michael Geh , Senior Partner of Raine & Horne and also the Vice-President of FIABCI Malaysian Chapter with numbers from NAPIC.
What’s your hunch about property market in Selangor today? It’s okay, since majority are quite negative anyway, let me confirm that you are right. Total number of property transactions in Selangor fell in Q1 of 2015 vs Q4 2014. From a total of 15,613 in Q4 2014 which was already a slight drop from Q3 2014, it dropped a further 869 units to 14,744 units. Average price has remained virtually unchanged. From RM441k on average in Q4 2014, it is now RM442k on average in Q1 2015. As usual, do note that average number here simply meant that there are higher priced properties as well as lower priced ones and it does not mean every transacted property was RM442k.
In fact for properties which are 1,000sf or higher, there’s barely any at this price range or lower. Even the SOHOs are priced higher and affordability is now pegged at RM500,000 or lower. Looking back a little would reveal that the final peak before everything started coming down was in Q3 of 2012. Taking a 4 year view meant that the new units bought then should start being delivered in 2016. Perhaps this may mean that prices for certain units would remain under pressure for some time more.
Always note that urbanisation continues to happen and with limited land available within KL, the next growth would be all the secondary spots of today. As for whether the buyers then may suffer losses if they sell today, based on the stats, it is not likely. The average price in Q3 2012 was just RM330k.The average price for Q1 2015 is an additional RM112k at RM442k. It meant that even if the buyers were to sell a little lower than today’s price level, they should do just fine. Perhaps a consideration would be the RPGT, like what my old friend told me a few weeks ago. Read here: Scared of RPGT but willing to wait and risk?
A word of caution, buying beyond the usual affordability level of majority would mean that whatever you buy may not find a buyer for some periods of time. Please do not buy because the agent tells you that the price would always go higher in hotspots or even due to MRT. As for the question of whether there’s a bubble awaiting to burst, I do not think so. Read here: Spotting signs of a property bubble, 3 points (updated) Happy investing.
written on 8 July 2015
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