The HOC 2019 will be here in less than 2 weeks time. There are reportedly 180 developers with a stock of unsold properties worth RM22.5 billion. Whether these units sell or not would depend on the discounts that the developers are willing to offer to prospective buyers, the type of properties, location and housing loan approvals. Of course, we also have a Deputy Minister who asked for more leeways from banks too. Read here. Speaking about discounts, Housing and Local Government Minister Zuraida Kamaruddin wishes for developers at the expo to give at least 10 per cent discount or higher to bridge the gap between property oversupply and lack of affordable homes. Our Finance Minister Lim Guan Eng meanwhile hopes that the discount can be higher. Perhaps up to 20 percent? (Read here)
Article in TheSundaily.my here. It quoted that some banks are rejecting home loan applications even when buyers have a clean Central Credit Reference Information System (CCRIS) record. (Let’s be frank. If the LOAN amount is ABOVE what the salary could afford, whether the CCRIS is clean or super clean, I think banks will still reject the application and they should!) Property overhang in Malaysia rose by 48 percent in Q3 2018 vs Q3 2017 and this reflected a mismatch between supply and demand. It also quoted National House Buyers Association secretary-general Datuk Chang Kim Loong who said that the number of overhang or unsold properties will continue to rise if developers ignore the three criteria that define affordable housing. Houses priced between RM150,000 and RM300,000 should be developed with a desirable size of 800 square feet, providing at least two bedrooms, and in the right location. Chang was also baffled with claims from developers that they could still sell houses priced between RM600,000 and RM800,000, which are in good locations. Article in TheSundaily.my here.
By the way, it is not just about discounts yeah. It is about building a positive sentiment where people feel positive in their future. Just 8 years ago, even when prices were on the way up, when we ask 5 of our friends if we should buy our first property, all 5 would tell us to go ahead. (somehow they feel the prices can only be going up non-stop). Today, in the same situation, when we ask 5 of our friends, all 5 would tell us to wait and see. This is even if everything else remain almost the same! (Salary and affordable property price) As for positive sentiment, these meant clear policies to guide the market too. Happy following and well, if you found a good unit you like during the HOC 2019, it’s still a buy yeah. Property investment is for the long term.
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written on 12 Feb 2019
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