Primary property market Malaysia is DOWN in H1 2016

Okay, I think if I ask ten different people, they may be able to guess this as well. Market is really slow these days. I have always thought primary market, especially the affordable ones should still be okay but I think I was wrong. Reported in Theedgeproperty, according to the Valuation and Property Services Department director-general Datuk Farzan Abdul Rahman, the primary market property sales is DOWN in H1 2016 versus the same period a year ago. Two major reasons cited were sluggish global economy and poor local market sentiments.

The first issue, sluggish global economy may be here for quite some time yet. Every world body is expecting this lethargic GDP growth to continue. As for poor local market sentiments, I think we can feel it. Especially when we heard of so and so is now a Uber driver. The last conversation I had, someone told me his father-in-law earned over RM3,500 per month as a Uber driver. Quite a good number for a retiree definitely. Some numbers were announced by Datuk Farzan as well. Sales of primary market homes in the RM500,001 to RM1 million range fell to 513 units in H1 2016. This is very far away from the 7,037 units sold in H1 2015. Of course, the number of units launched has also shrunk from 15,687 units in H1 2015 to just 2,597 units in H1 2016.

On an overall basis, total units launched in the property market fell to 10,655 units in H1 2016 compared to 49,280 units in H1 2015. Total units sold for H1 2015 was just 2,732 units compared with 23,909 units in 1H2015. Highest number of units sold, at 724 units was for homes that was priced from RM300,001 to RM400,000. In terms of launches, the highest number or 2,597 units were from the RM500,001 to RM1 million category. House Price Index is however still growing at 6.8 percent for Q1 2016 though slower than Q4 2015 at 7.2 percent.

I personally do think many more units are being launched but the price range is moving downwards and is no longer in the RM500,000 – RM1,000,000 category. In fact most developers could feel that if they launch anything too highly priced, it’s quite suicidal today. As for prices, it’s important to note that these remain average numbers. Get to know the type of property you like and start monitoring. It’s always a cycle and there’s no such thing as ‘always up’ or ‘always down’ for the property market. On a longer term, it remains positive. Happy holding back or jumping in.

written on 27 July 2016

Next suggested article:   Asia Property Market Sentiment Survey: 2018 peak again

 

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