Mixed outlook for Sarawak property sector in 2018 — Observer
KUCHING: The outlook for the property sector in Sarawak this year appears to be mixed, observes a key industry player.
Sarawak Housing and Real Estate Developers Association (Sheda) Kuching branch advisor Sim Kiang Chiok said although last year’s trend for the sector marked what might have been the lowest point of the downward curve, this year should mark ‘the start of the climb’.
“The economic outlook by the World Bank and IMF (International Monetary Fund) predicts that 2018 would see a growth of five to 5.5 per cent for Malaysia. The oil and gas sector will see a revival, with petrol prices climbing, USA seeing growth in its economy and Europe slowly improving theirs, and also China continuing to grow strongly.
“Year 2018 is expected to see the upturn of the global economy, which should benefit Malaysia,” he said in a statement on Monday.
All these factors, he said, should bode well with the local housing sector.
“Housing is one of basic human needs and thus, demand would be there whenever there are population growth, full employment, rural-to- urban migration and robust economic growth.
“In Sarawak, it is observed that houses have appreciated in value over the past decade, so the demand is still good.
“This said, we also see that banks begin to be overly cautious in their lending policies, basing loans strictly on the proven incomes of the borrowers and not allowing any projection of income growth or their undeclared income from their part-time jobs or investments.
“This is disheartening,” elaborated.
Based on his observation, household debts had dropped from 89.1 per cent in 2015 to 88.4 per cent in 2016, while bad debts from residential properties remained at a stable 1.1 per cent throughout 2014 to 2016.
“The demand of houses in Sarawak he has slowed down, but this only concerns properties above the RM450,000 selling price, where the end-financing is difficult to obtain. On the other hand, there are strong demands for houses selling below RM350,000 per unit,” said Sim, adding that during Sheda Kuching roadshow last November, its members were selling numerous single-storey terraced units with prices starting from RM210,000 per unit, and apartments below the RM350,000 price per unit.
“These are the good signs of developers building properties to match the demand and also the strict lending policies of the banks.
Still, Sim acknowledged that there had been a ‘mismatch situation’, where houses were built bigger than what the market could afford.
“So, we shall see that in 2018, the property market will exhibit a mixed outlook.
“The prices of houses in Sarawak for 2018 will appreciate – slowly. But following the increased interest rates, it would more difficult to obtain financing.
“The mitigating factor would be the appreciating ringgit against major currencies, which should reduce costs of imported goods and raw materials.”