It does seem that it’s never ending cycle of bad news for the property market of Malaysia. Okay, if we really read about some other prominent markets, the bad news have also started. For some, like Singapore, it has moved to a ‘arctic cold’ stage for the agents. This was a recent comment from my good friend Michael Geh, Senior Partner of Raine & Horne International Zaki + Partners Sdn Bhd. In an article in The Star, Foo Gee Jen the Managing Director of CH Williams Talhar& Wing’s (WTW) said that the residential value and transaction numbers for 2016 would be LOWER than 2016. Buyer sentiment will be subdued for 2016. Foo also mentioned that another cause is the uncertainty in the job market which I think is more of sentiment instead of actual rising unemployment. For the property market’s sake, I hope I am right.
Foo added however that demand for residential property in established areas will continue to remain healthy. Actually this is not hard to see. People are still crazy for that few oomph areas and are willing to pay a premium for it even today. Read here: Property prices too high? YOU might be the main reason He added that the secondary market is likely to be more lively compared to the primary market even if it is nowhere near the level of a few years back. Please believe him on this and stay focussed on secondary as your primary focus. My personal thoughts: Buy secondary. 30-40% cheaper
He then mentioned that the high-rise market has a mismatch between supply and demand, especially in the Klang Valley. He specifically mentioned that there is a huge supply of shoebox / Mickey Mouse units and due to this, it will take a long time to fill. Let’s be objective and stay savvy. There’s really a limit to how high these small units which are also known as mosquito unit in Hong Kong can rise. Read here: The BIG idea for small units, be real. With the falling ringgit, there has been more institutional investors compared to retail buyers for the local properties. Last year, a totalof 2.05million sq ft of new mall space entered Klang Valley in 2015. This means that malls in less popular areas willface huge difficulty. Fortunately, this would also be helped by the increasing demand by the young as well as tourists. Read here: Malls, malls, malls everywhere, rate of survival?
I think Foo remains pretty optimistic with the market even if everyone should be very careful with what they buy currently. The property market may not be turning around so soon and in a dinner just last week, another agent friend has started driving for UBER and his girlfriend rejoined the corporate world. Last weekend though, the property agent who showed me around the Sungai Buloh area told me that he had just re-entered the real estate industry last year after a stint in the corporate world. He likes the real estate world better. Wishing everyone the best and happy investing.
written on 14 Jan 2016
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