Property market recovery? Approved loans are up? Sustainable?

My new neighbour just moved in last month. My ex-neighbour moved out 7 months ago. My current place is under leasehold. What this meant is that my ex-neighbour managed to sell his home pretty quickly! Transactions for leasehold properties within Selangor may take up to 6 months. So, should we say the market is getting better because my ex-neighbour bought a new place and my new neighbour also bought a new place? Both are definitely earning enough to upgrade, right? I am staying put lah. Moving home is a huge headache and my wife hates it a lot. However, she supports my view that property investment is a good move. I just told a good friend during lunch that the property market seems to be getting better. The reason I say so is because I read a lot less negative property news in Facebook. (Haha…) I think it’s best for us to stay sober because the market recovery may not last.

That’s the view of MIDF Research in an article in TheSunDaily.   It said that even though the net approved loan for January 2017 year-on-year (y-o-y) is up 6% to RM8.72 billion, this is not a signal of a sustained recovery for the property market. It shared that this is because the actual approval rate is still at 40.5 percent. It said that the loan demand was still weak and in fact declined 1percent because the ringgit’s weakness affected consumer sentiment.  (Anyone who’s buying property in Malaysia, it’s best to know what we are really buying instead of whether ringgit is up or down. By the way, it’s mostly affected by the US$ and not due to sudden fundamental changes. Just look at the sudden rise in stock market to understand a bit more)  Here’s a recent article on it. Anything overvalued is best skipped, stocks for example

MIDF said, “Note that the 6% improvement in applied loan was attributed to a 7% y-o-y increase in approval rate, which more than offset the 1% decline in demand.” Among the few key states, Penang grew the slowest; 3.4 percent, Selangor by 7.5 percent, Johor by 5.5 percent and Kuala Lumpur by 5.1 percent. All are up. The support for price growth should be better for Greater KL because of continuous urbanisation. According to the latest Property Market Report released by National Property Information Centre, Malaysia’s property market transaction value declined 6.3 percent quarter-on-quarter (q-o-q) to RM30.8 billion in Q3’2016. The lower transaction value is consistent with the fall in transaction volume by 8.5% q-o-q to 76,456 units. Article here: Property transactions and price, both dropping. (Jan – Sept 2016)  MIDF also shared that based on the drop in Malaysian Institute of Economic Research’s consumer sentiment index from 73.6 points in Q3 to 69.8 points in Q4, it is possible that consumers are expecting rising prices to intensify and any shopping is now conducted selectively.  (When we really believe that it’s getting worse, stop spending on everything unnecessary……) Happy believing.

written on 30 March 2017

Next suggested article:   It’s renter’s market, that’s why best to buy

 

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