Survey: Property investment still attractive but recovery takes time.

Whenever it comes to property investment, it’s best that we make our own decisions and not follow others blindly. However, before we make that decision, it’s always good to note what the majority are thinking about the property market. Let’s take a look at a recent article in The Sun Daily highlighting some conclusions from a survey of Asia Property Market by iProperty.com  Out of the 13,000 respondents, 40 percent were from Malaysia. Respondents include mostly property owners looking to purchase another property (39 percent) and first-time home buyers (26 percent) Another 15 percent is monitoring.

As per the survey, the industry outlook for H1 2016 for the Malaysian property market is in a recovery mode. Perhaps what the respondents are saying in brief is this; it’s not going to be suddenly positive. (my personal comments in (bold).

1) all the cooling measures implemented thus far. (yes, of course this discouraged people from simply buying. Read a bit more here: PropertyGuru:Negative views on property market is up

2) people are still feeling the effects of GST (I really do not think this is a major reason but perhaps I am the minority. Earlier article here: Increase selling price due to GST? It depends on margin)

3) political and economic issues (politically, no comments. it’s already a either here or there situation today anyway. economically, Malaysia’s growth will still be good enough versus the world out there. Read here: Moody’s: Fundamentally Malaysia still fine)  

4) the weakening ringgit; (Agree that Ringgit is still weak. Agree also that Ringgit will continue to be affected by mostly external developments. However, most buyers of properties are Malaysians and they are buying in Ringgit anyway. Read here:Ringgit down, thus property prices up

5) it’s tough to get housing loans to be approved. (With so many negativity in the market, I think we should feel fortunate that BNM tightened all the guidelines since a few years back. One strong reason for property market to crash is when “everyone could borrow”. It happened once in 2008, let’s make sure it does not start with Malaysia this time….Earlier article about property sector as a risk to the economy here: Property sector becoming a risk to economic growth

If you would like to read all the findings in more in-depth, it’s here.

Else, some other results analysis includes the following:

  1. Singaporean’s interest in Malaysian properties, especially Iskandar increased due to weakening Ringgit.
  2. It’s getting harder to save money with increasing household expenses and 22 percent may face difficulty in servicing their home loans.
  3. Ringgit’s downtrend meant fewer Malaysians are thinking of investing overseas.
  4. Insufficient number of affordable homes that they could buy (SIGH)
  5. Conclusion? Malaysians still believe property investment to be most attractive! (capital growth and stability)

According to iProperty’s CEO, Georg Chmiel, he expects some change around the second half of 2016, anticipating the market to “inch forward slowly and rise again in a year or two”.

Happy ‘monitoring.’

written on 14 Apr 2016

Next suggested article: Why our salary seldom rise as fast as property price

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