Press Release by Malaysian Institute of Estate Agents (MIEA) – DEBUNKING THE HALF-PRICED VALUE OF PROPERTIES
We refer to a recent article in a daily under the heading “Houses at half-price, anyone?”.
We in Malaysian Institute of Estate Agents (MIEA) took a stand to ‘debunk’ the notion. Its President Ms. Chan Ai Cheng said that this question refers to two named developers who have advertised that they are selling properties with a discount of 50%.
We came to understand that this one developer in KL made a big hue in their marketing campaign and put up one shop lot for sale at that discounted price, just one unit and no residential properties involved. The other a Johor developer also reported to have placed units for sale at the same 50% discounted price citing reason that the units are undesirable. These are isolated cases and should not be used as a yardstick that it is happening all around the country.
We do agree that developers do adjust the prices from time to time to keep up with the required sale and the need for cash flow. Majority of the developers do offer discounts but not as dramatic as reported. In a recent poll conducted by MIEA with real estate practitioners who are on the ground and knows exactly the happenings showed no such evidence.
In fact, property prices in established localities are holding on and in newly well-planned townships. Here the developers have no intention of reviewing their selling prices as demand is strong.
As much as we get excited with news flash here and there, it is always good to note that there will always be anomaly in the market but it is also very important to do your own research and let data guide your thoughts. It is important to understand that “Developers Packages” are what makes buying properties from the developers very attractive.
This normally involves low or ‘0’ downpayment, rebates, freebies and 100% loan financing etc. When stripped to the nett prices, this may give an illusion that prices have fallen dramatically when in fact different prices are being quoted at different points of marketing, e.g., Price before and after discounts to make it look that the price is low.
The public must be aware that buying a property is one of the safest investments and the best hedge against inflation and as such, over time, property price increases as it is a medium to long term investment. The rule of investment selection must always be applied.
To prove this point, the Malaysian House Price Index as reported in the NAPIC Report by Jabatan Penilaian dan Perkhidmatan Harta (JPPH), that over the last 10 years, the index has changed from 100 since 2010 to 199.1 in 2020.
Though admittedly the growth rate over the past 3 years have been less than 5% due to the challenges in the property market, the key takeaway is that the Malaysian property market is resilient.
Source : NAPIC, JPPH
The table below also proves an interesting point in that though the Volume of transaction has decreased over the last three years. The average property prices have gone up looking at 2020 and Q1 2021.
In a survey conducted by MIEA among its members, out of 502 respondents 28% stated that the property prices in the secondary market have remained unchanged while 22% stated that the price went down by 10% and another 5% said prices increased more than 10%.
As we all know there is no fire sale with the exception that those who were really affected by the lockdown had to sell and, in such situations, the price in most cases have reduced.
Ai Cheng further reiterated that as an association we also have the solemn duty and responsibility to protect the interest of the public and isolated incidental and sensational reports of this nature can disrupt the sentiments of buyers and sellers. The property market is stable though there are price movement based on demand and supply.
We confidently foresee that as soon as the lockdown ends and sectors open up, there will be much interest generated in the property market, we will see an upswing in sales when the economy and the stability of the government is secured. She suggests that the public should take advantage of the various incentives the government has already laid out both for the primary and secondary market and take advantage as buyers of your options.
— end of press release —
By the way, kopiandproperty.com published an article about this ‘50% discounted property earlier. (click to read) The founder, Charles failed to get his close friend to sell to him at 50% discount. Yes, this 50% discount is really a great article puller but is definitely not applicable to the market today, not the primary, not the secondary market too.
Next suggested article: MM2H reactivation. Concerns and suggestions by MIEA