Pressing need to meet lack of affordable housing in market
KUCHING: There is a pressing need to address the lack of affordable housing in the market, especially in key urban areas where more efforts are needed to meet the growing demand.
According to PropertyGuru Malaysia country manager Sheldon Fernandez, the most impacted demographic remains the middle-income mass market segment – those in Generation Y – which comprises 38 per cent of the population and would likely be the ones to find their dreams of owning a home dashed.
“However, the market continues to have its bright spots with the rental market expected to remain strong fuelled by a growing pool of young, aspiring first- time homeowners who in differing their home purchase decision, will look to the rental market to provide a roof over their heads while continuing to save for their future home,” he told The Borneo Post in an email interview.
“It is likely that rentals may increase or remain stable but this will depend on the location of the property per se,” Fernandez added.
Certain locations such as higher-end rental properties might see rentals reduced due to external factors such as the current slump in the oil and gas industry, he said, leading to an exodus of expats leaving many vacant units in the city centre.
Fernandez highlighted that in developing homes that meet the budget of first-time homeowners and Generation Y, developers will build smaller units in the city centre and other urban centres to keep prices below or within the RM300,000 to RM500,000 range, with unit sizes ranging from 450 square feet (sqft) to 850 sqft.
He noted that similarly, the Selangor Housing and Property Board (LPHS) has implemented a price cap for affordable small office home offices (SOHOs), small office versatile offices (SOVOs), and small office flexi offices (SOFOs) to be at RM230,000, while serviced apartments are capped at RM270,000.
“The sizes of these unit range from 450 sqft to 550 sqft,” he said.
Fernandez went on to note that homes that offer good value in good locations, especially those which are transit oriented developments (TOD) or meet the growing demand among upgraders for suburban living - slightly away from the city will continue to see uptake.
“Consistent with this trend, locations in the outskirts of Selangor i.e. Rawang, Semenyih, Batu Arang, Kota Kemuning, etc. are beginning to emerge as the new growth spots for property still
However, the market continues to have its bright spots with the rental market expected to remain strong fuelled by a growing pool of young, aspiring first-time homeowners who in differing their home purchase decision, will look to the rental market to provide a roof over their heads while continuing to save for their future home. Sheldon Fernandez, PropertyGuru Malaysia country manager
within relatively close proximity to the Klang Valley,” he said.
He added that as buyers look to finance their homes, there is likely to be more withdrawals from the Employee Provident Fund (EPF) with both number and value of withdrawals going up in 2017.
Overall, with 2016 having been a sluggish year for the property market - marked by declining transaction sales value and sales volumes, Fernandez projected that 2017 is likely to show a similar downtrend - mired by the unresolved issues of unaffordability in home pricing, the high rejection of loan applications and other macroeconomic issues such as rising living costs and lack of growth in incomes.
“Homes priced between the RM500,001 to RM700,000 range are likely to see most number of loan rejections and thence slower sales,” he reaffirmed.