ProeprtyGuru: Malaysian property prices on a decline amidst complex scenarios

KUALA LUMPUR: Property prices in Malaysia continued to decline in the fourth quarter (Q4) of 2017 as the market corrected itself amid a complex scenario of growing oversupply in certain segments and a prevailing lack of consumer affordability, said the PropertyGuru Group.

The Property GuruMarket Index ( PMI), which tracks the asking prices of residential properties in Malaysia, showed a decrease of 1.6 per cent for Q4 compared with the previous quarter (Q3: 0.2 per cent decrease).

In a year- on-year comparison, prices fell by 3.7 per cent. Save for June, February and October, all other months in 2017 showed a decline in asking prices across all classes of residential properties, it said in a statement yesterday.

PropertyGuru Malaysia country manager, Sheldon Fernandez, said the declining trend was consistent with prevailing market sentiment and the ongoing price correction was healthy for the residential sector in the medium and long term.

“The declining trend was evident throughout 2016 and 2017, so it’s no surprise. Importantly, it has been gradual, so there are no significant shocks to the market and both buyers and sellers can adjust themselves accordingly.

“Declining prices usually corelate to improved consumer satisfaction. In fact, our last consumer sentiment survey showed consumer positivity towards the real estate sector has improved,” he said.

According to PropertyGuru’s latest consumer sentiment survey released in January, consumer satisfaction had improved to 38 per cent, with 57 per cent of Malaysians intending to buy in the next six months against 52 per cent previously.

Fernandez said with the lack of affordability continuing to be a major issue, there was greater downward pressure on asking prices.

“While the desire to transact remains strong, most property buyers – about 67 per cent – can only afford houses priced between RM300,000 and RM500,000.

“In addition, PropertyGuru data shows that three out of four Malaysians believe the market to be oversupplied. Hence, many buyers are opting to adopt a wait-andsee approach, especially with talk of general elections throughout 2017,” added Fernandez.

PropertyGuru said in tandem with the national price trend, all key property markets, including Kuala Lumpur, Selangor, Johor and Penang, also saw asking prices decline in Q4 of 2017.

In Kuala Lumpur, prices dropped by 1.2 per cent compared with the previous quarter (Q3: 1.4 per cent) and similarly, Selangor, Johor and Penang saw quarterly price decreases of 2.1 per cent, 0.5 per cent and 0.2 per cent respectively, it said.

However, the property portal said certain key locations across all four property epicentres had experienced price stability, or sellers were still able to relatively maintain their price offerings.

In the Klang Valley, these would be Sentul and Bangsar, while up north, Balik Pulau and Tanjung Bungah in Penang had remained comparatively stable, it noted.

“Bangsar is a mature location with an established name.Hence, the ability of owners, especially those who bought their properties many years ago to hold on to their prices,” explained Fernandez.

Meanwhile, down south in Johor, prices were largely on an uptrend for Q4, but popular locations such as Nusajaya saw prices decline slightly, while emerging hotspots like Gelang Patah showed an upward price movement. — Bernama