PropertyGuru brought together a distinguished panel of industry experts and speakers for its PropertyGuru 2017 Property Outlook Forum to provide insights into the prospects for the Malaysian real estate sector in 2017. I think many are waiting for some insights because of the current challenging overall market in Malaysia. (Especially when it comes to sentiment and the recent ringgit’s movement downwards). The panels include Dato’ Charon Mokhzani, Managing Director of Khazanah Research Institute (KRI), Datuk Seri FD Iskandar, President of the Real Estate and Housing Developers’ Association Malaysia (REHDA), Prem Kumar, Executive Director of Jones Lang Wootton, Gary Chua, CEO of SMART Financing and Chris Tan, Managing Partner of CHUR Associates.
Many things were reported but I think this should be something interesting to note. Remember some recent predictions about the recovery happening either in 2017 or even 2018? Well, according to the newly launched PropertyGuru Property Price Index, the selling price for properties would be dropping slightly and rental market would be growing with more buyers opting to rent temporarily because of the inability to qualify for loans as well as the present absolute high prices of homes. In brief, the market continue to be good for potential buyers but the quality of these potential buyers are not that good. In other words, they either need to get the banks to relax the lending requirements or the selling prices would need to drop to a level that these buyers could afford to buy. I am not sure which one to support because both are considered negative for the market.
Some details about the PropertyGuru Property Price Index 2017. It is showing the average asking prices in mid-2015 was RM586 per sq ft while mid-2016 saw it shift to RM554 per sq ft. There is a possibility that the average asking price for 2017 to drop a further RM35 per sq ft – RM40 per sq ft. These prices are most evident for high-rises. For homes priced between RM500,000 to RM700,000 there would be lower sales due to the highest number of loan rejections. Two other reasons were also stated; the rising living costs and smaller growth in incomes. I personally think if majority of everyone continue to be negative with the market, including all the industry players and every forum panelists in every property related forums, the 2017 property market would continue to be a slow and falling one. Perhaps we are going into a vicious cycle and it would take lots of effort from everyone for the property market to stabilise and start growing again. Let’s keep following all these developments but at the same time, stay objective and keep looking and viewing. Good opportunities may not come by often. Cheers.
written on 1 Dec 2016
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