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Supply continue dropping, prices should start increasing

One high profile event happened recently, CPA Australia’s CPA Congress. One of the forum included this: “Property Watch — Buy, Sell or Hold?.” Very briefly, the industry experts invited are all predicting that future increases in property prices will be happening. This is despite the current property slump in Malaysia where transactions are concerned. In fact, according to these experts, the incoming supply is falling. In other words, with reduction in supply and equal or higher demand, prices would just have to increase. According to Zerin properties group chief executive officer and founder Previndran Singhe, many developers are holding back launches and thus supply is dropping this year (2015) and even next year (2016). This meant property prices would start to increase.
According to Real Estate and Housing Developers’ Association Datuk Seri Michael Yam, he is confident about the outlook of the property market even if the current market performance has been lacklustre. He said that location should no longer be the only consideration but also timing. This is because the property landscape continue to change. He commented the two things that every developer is saying today, that the poor market sentiment is caused by implementation of the goods and services tax (GST) and a weakening ringgit which has contributed to higher construction costs. (I can only agree somewhat.)
I think it’s also important to note that in terms of so called better locations, this is being expanded with new MRTs and LRTs. In other words, even if the current secondary location is a little faraway or having bad jams, these may be a thing of the past if one were to take the public transport instead. As for timing, well, my personal advice remains the same. Buy to stay and buy when you can already afford an objective buy. There’s no need to stretch till the point of breaking. Even those who said I prefer a certain area because it has a certain mall, do note that there are lots of new malls coming up as well. Soon, we may be spoilt for choice. Do not take forever but there’s little need to rush either.
Bina Puri Holdings Bhd group executive director Matthew Tee Kai Woon said that besides GST, manpower cost is moving up now. He also reminded everyone that property prices in prime locations almost never went down even during economic slowdowns. Previndran named a few property hotspots for investment opportunities including the Klang Valley, Greater Kuala Lumpur, Penang, Johor and Kota Kinabalu. Yam urged buyers to look for more attractive buys from the secondary market as well. There are gems to be found. Happy learning.
Agree with the views from these property industry heavyweights? Do comment if any.
written on 23 Sept 2015
Next suggested article: Better sentiment or better pricing and higher transactions

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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