I have been sharing that prices for properties could not drop sharply unless the sellers (owners) themselves become desperate and start selling lower, sharply. It has never been due to unsold units rising or high number of unsold units. This is question everyone should have in their mind when they are indeed waiting for a property they like to fall in price. “Will the current owners of those properties (in that area) be willing to sell at a lower price to me?” If the answer is No, then move on and stop waiting. If the answer is Yes, then the next question is how do I get myself to be the first in line to know as soon as such units are available? This is when we should give a call to the friendly real estate negotiators specialising in the area. Tell them nicely what we are looking for and the target price. (If it’s too low, then they will never call you back) Want to know what Bank Negara Malaysia (BNM)says?
Article in edgeprop.my here. In its Financial Stability and Payment Systems Report 2018, BNM said that continuing soft market conditions and affordability issues in the country may see the level of unsold housing units rise further in the short term, however, sharp declines in house prices are unlikely. “During the first nine months of 2018, despite fewer launches of new housing units, higher activity in the price segment of below RM500,000 across four key states, namely Kuala Lumpur, Selangor, Penang and Johor supported a marginal growth in the total volume of housing transactions.” (Please read this again. MARGINAL growth in housing transactions for these 4 states).
However, in other states, house prices at this level are still unaffordable. Thus it has contributed to the further increase in the stock of unsold housing units by 22.5% in the nine months to September 2018. (Unsold is up but ONLY for states where RM500,000 is considered unaffordable and does NOT include Kuala Lumpur, Selangor, Penang and Johor) BNM says it does not expect any large and broad-based decline in house prices and that the outlook for the housing market is expected to improve in the near future. It also said that DEMAND for affordable homes will continue to outstrip new SUPPLY in the foreseeable future. (PLEASE take note of this closely) Article in edgeprop.my here.
Briefly, the property market continue to have supply issue for the affordable units and demand is way higher than what is being launched and built today. However unsold units in some states continue to rise because of mismatch in the pricing and affordability. If we are still waiting for a huge fall in property prices, especially in favourable locations, let’s just know that we will wait for a very long time. BNM expects the property market to gradually improve. I think it meant that as launches start to match the affordability expectations, the transactions will continue to rise. This will definitely pull more developers to launch the units at the right price and soon, the unsold units will stop growing. That’s definitely good news. As for when will that happen, happy following.
Article written and edited by Charles. News article summarised by Dina Batrisyia.
written on 28 March 2019
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