Last year, REHDA Penang said 2015 would be a slower year where property transactions are concerned. Of course they were referring to their member’s predictions. In fact for primary properties, unless the developers are willing to re-plan and somehow roll out more affordable ones, the demand will continue to be weak. It has reached the ‘affordability’ borderline for many buyers. Even if they try, their loans would be rejected anyway. Recently, Moody’s Investors Service said that 2015 property demand will be slowing further. The major reasons continue to be the cooling measures in the property market as well as weak buyer sentiment. It’s assistant vice president and analyst Jacintha Poh said: “We expect the anticipation of higher mortgage rates in 2015 and the implementation of a 6% goods and service tax in April to dampen sales in 2015 as buyers take a wait-and-see approach.”
Actually, are we supposed to buy during slower times or vibrant times? Suddenly many would answer ‘during slower times’. Yet, how many can actually see through the negativity and actually set out to find the undervalued ones? Why is this so? One major reason is that there has been no fire-sale thus far. The current batch of owners are still able to hold on to their properties. One major reason? Well, majority of all mortgages are only for one property in Malaysia. Read here: majority of home buyers have just one outstanding loan As for the buyers who bought much earlier on, the prices they paid were lower and if they have rented it out, the rental would be able to cover the mortgage payments easily. This is why despite a negative sentiment and everyone saying it’s a buyers’ market, prices has not really moved a lot. For it to move, we need a crisis.
As usual, the few prominent property markets would face greatest pressure. Moody’s expects a challenging time for developers focussed in Johor, Kuala Lumpur, Selangor and Penang. The major reason? Many of the properties in these markets have already surpassed the RM1 million mark and this can only target the very high income households or even foreign investors. It also said that the demand for more affordable homes which are bought for own stay would remain resilient. Happy searching for one.
written on 14 Feb 2015
Next suggested article: Property market is slowing. Agree. However, there are today MORE interested people.