Property market expected to rebound next year – analyst
KOTA KINABALU: Residential property buyers have been advised to make their purchase as soon as possible and not to wait for the right time, according to a property consultant.
Twins Realty principal Saw Wai Kean forecasted that the market will start recovering by next year.
Saw said over the past years, there were a decrease in residential transaction volume in Malaysia which means that less people had bought residential units.
He explained that one of the reasons for the drop was due to the stringent housing loan approval by banks.
Based on Bank Negara Malaysia source, the housing loan approval rate in May this year, stood at 42%.
However, it was a healthy sign as it would not create property bubble in the country, he said in a talk on property market outlook 2018 at KK One Stop Property Centre, in Sutera Avenue, Sembulan here yesterday.
Meanwhile, the transaction value for the residential units in the country kept increasing with an average appreciation rate of 8.2% over seven years (2010 - 2017), while for Kota Kinabalu (KK) and Penampang at 12% and 11%, respectively.
Despite the figure, Saw highlighted there were significant improvement in demand and transaction value for residential units in the first quarter of 2018 (Q1 2018) compared to the first quarter of 2017.
For the country’s Q1 2018, demand increased by four per cent while transaction value rose by one per cent. For KK and Penampang, demand rose by 16% and 51%, while transaction value went up by 31% and 80% respectively.
Thus, he forecasted that the average residential price per unit in Malaysia will shoot up to 6.5% which is RM374,390 by the end of this year.
As for KK and Penampang, he forecasted increments of 3% and 13% in residential price per unit at RM579,860 and RM393,530, respectively.
Saw said there is also an increase in property overhang of the country which stood at 11% while for KK at 51% and Penampang at nine per cent. Property overhang means units that have been launched and remained unsold for more than nine months.
Saw explained that the matter depended on the developer and its target buyers. He said if the developer launched something which other people could not accept (afford), surplus will occur.
Saw further explained, the residential price in town areas, such as in KK, are high.
Thus, for developers who targeting foreign investors and offered residential units at RM900RM 1,000 per square foot (sq. ft), the price is not affordable for the local people, he explained.
When looking into the income group of overall Sabahans, especially in KK, if the residential units are sold at RM800/ sq. ft, they are kind of hard to afford, he added.
Thus, he suggested for the residential price in KK to be at RM700 per sq. ft while for suburban areas such as Inanam to be at RM500-RM550 per sq. ft.
Saw also said that there is no need to worry over the value of property overhang in KK, although it looked alarming.
When talking about population increase annually, there is nothing wrong with demand but (local) people still could not afford (to buy residential unit in KK) because the price is too high, he said.
As for Penampang, due to connectivity, especially the ongoing Pan Borneo highway, and affordable property prices for the local people, Saw said the residential units in the area were selling fast. Thus, making the Penampang property overhang at a low level.
“Here the people’s buying behaviour is different from KL (Kuala Lumpur). Here it is conservative, which means slow and steady.
“They wait for the construction up to a certain stage then they come and purchase,” he said.
He also said that the current government brought out a very positive outlook and more people are starting to have confidence in the property market.
The talk was organized by Twins Realty which is a project marketing and one stop property solution provider in Malaysia.