I love to ask this question during my talks. “Is the Malaysian property market slowing down? Transactions down? Prices down?’ Until today, the answer I got from most of everyone is that they continue to believe that the property market where transactions are concerned continue to drop. Allow me to correct everyone with a image below. It is not, since 2018.
We could see that the final year where the growth was still positive was in 2014 versus 2013. Beginning 2015, the numbers have been dropping for both the transactions and value and this has continued until 2017. However, 2018 resisted this drop and it has actually inched a few centimetres up. 0.6% for volume and 0.3% for value. In brief, the property prices where transactions are concerned are actually growing smaller than the transactions. It’s down slightly. What’s happening for 2019 then? Will it grow versus 2018?
Article in nst.com.my According to data unveiled by National Property Information Centre (Napic) in September, there was some improvement in the local property market in the first half of this year (H1 2019). The total number of transactions nationwide rose 6.9 per cent from 149,862 in the first half of 2018 (H1 2018) to 160,172 in the first six months of this year. Value-wise, there was a marginal 0.8 per cent increase to RM68.3 billion in H1 2019 from RM67.74 billion in H1 2018.
Landserve (Johor Baru) Sdn Bhd managing director Chen King Hoaw says data shows that the property overhang growth pace has slowed. He said, “Residential overhang increased marginally by 1.5 per cent in H1 2019 versus 18.8 per cent in H1 2016, 10.1 per cent in the second half (H2) of 2016, 41.1 per cent in H1 2017, 18.5 per cent in H2 2017, 18.1 per cent in H1 2018 and 10.6 per cent in H2 2018, signalling that the rise in residential overhang had actually slowed down.” Please do refer to the full article here in nst for more of his views.
Unless some unforeseen circumstances happen, 2019 will be the second year where the volume and value of transactions continue to be positive yeah. Let’s see what is the final figure. As for those still asking why got so many transactions, please also ask some of our colleagues yeah. At the moment, majority continue to be renting versus owning. If we ask many of those getting married, many of their father-in-laws were also asking the new couple to buy a property. I know because my father-in-law did. Haha.
As for speculators, with the current real property gains tax (RPGT) regime which is extended to forever 5%, I do think they will focus on other stuffs versus the property market. Evaluate and buy based on why. Property will always remain a need then, now and future. Happy understanding.
Next suggested article: Investing out of the city you currently live in