Prices bot­tom­ing out

JPPH says al­though the sales of res­i­den­tial units have im­proved in the first two months of the year, the prop­erty over­hang sit­u­a­tion re­mains

The Star Malaysia - StarBiz - - Front Page - By EU­GENE MAHALINGAM eu­genicz@thes­

KAJANG: Res­i­den­tial prop­erty trans­ac­tions im­proved in the first two months of this year, but data re­leased by the Val­u­a­tion and Prop­erty Ser­vices Depart­ment (JPPH) showed that the over­hang sit­u­a­tion is still over­whelm­ing.

JPPH’s val­u­a­tion and prop­erty ser­vices di­rec­tor-gen­eral Nordin Da­harom said that trans­ac­tions have im­proved by 4% in the first two months of the year com­pared with the same pe­riod a year ago.

The JPPH data showed that the prop­erty mar­ket re­mained weak de­spite some green shoots, sup­port­ing re­cent re­ports from Bank Ne­gara which noted that mar­ket con­di­tions re­mained chal­leng­ing.

“The mar­ket is still soft, but things are im­prov­ing fol­low­ing the strong eco­nomic growth in 2017,” Nordin told re­porters af­ter the launch of the Prop­erty Mar­ket Re­port 2017 here yes­ter­day.

The vol­ume of over­hang in the res­i­den­tial seg­ment grew by 67.2% to 24,738 units but value grew by 82.8% to RM15.64bil, higher than the pre­vi­ous year.

“The over­hang re­mains, but the take-up rate of new launches is im­prov­ing. There­fore, the prospects for 2018 will be bet­ter than 2017,” he said.

Last Novem­ber, Bank Ne­gara said that the num­ber of un­sold res­i­den­tial prop­er­ties was at a dec- ade-high, with a ma­jor­ity of the units in the RM250,000 and above price range.

Nordin ex­pected the res­i­den­tial seg­ment to sta­bilise this year, fu­elled by the favourable eco­nomic con­di­tions and steady de­mand for res­i­den­tial prop­er­ties.

The coun­try’s econ­omy grew 5.9% last year, the strong­est since 2010, driven by do­mes­tic de­mand and strong ex­port per­for­mance.

Ac­cord­ing to the JPPH prop­erty mar­ket re­port, the over­all prop­erty sec­tor recorded 311,824 trans­ac­tions worth RM139.84bil in 2017, down by 2.7% in vol­ume and 3.8% in value com­pared with 2016.

Res­i­den­tial prop­erty con­tin­ued to sup­port the over­all sec­tor with a 62.4% mar­ket share, fol­lowed by agri­cul­ture prop­erty with a 22.5% share.

The res­i­den­tial prop­erty mar­ket recorded 194,684 trans­ac­tions worth RM68.47bil in 2017, which were 4.1% lower in vol­ume com­pared with 2016, but they in­creased by a mar­ginal 4.4% in value.

By price range, de­mand con­tin­ued to be in the RM200,000 and be­low price points, ac­count­ing for nearly 45% of the res­i­den­tial mar­ket vol­ume.

Last year saw 77,570 units of new launches, higher than those recorded in 2015 (58,411 units) and 2016 (52,713 units).

Kuala Lumpur recorded the high­est num­ber of launches in the coun­try with more than 22,000 units. Its sales per­for­mance was at a low 19.5%, fol­lowed by Se­lan­gor with 13,522 units and Jo­hor, 7,926 units.

Nordin said the drop in trans­ac­tions and vol­umes in 2017 were not as dras­tic as those recorded in re­cent years.

“Even though there was a de­crease in trans­ac­tions and vol­umes last year, it wasn’t as bad as in 2015 which was in the dou­ble-digit range. Last year, it was just 3.8%.”

Nordin also ex­pected the out­look for the re­tail prop­erty sub-seg­ment of the com­mer­cial prop­erty seg­ment to re­main chal­leng­ing this year.

“The sit­u­a­tion is chang­ing. Shop­ping trends are chang­ing. Re­tail out­lets will need to change the way they do busi­ness. More peo­ple are go­ing on­line and malls need to adapt,” he said.

Ac­cord­ing to the prop­erty mar­ket re­port, the com­mer­cial prop­erty seg­ment con­tin­ued to de­cline but at a mod­est rate. There were 22,162 trans­ac­tions recorded worth RM25.44bil in 2017, down by 6.7% in vol­ume and 29.2% in value com­pared with 2016.

The re­tail sub-seg­ment’s per­for­mance was sta­ble at 81.3% in 2017 com­pared with 81.4% in 2016, record­ing an an­nual take-up of more than 6.78 mil­lion sq ft.

Kuala Lumpur, Se­lan­gor, Jo­hor and Pe­nang saw a sig­nif­i­cant takeup rate as their newly com­pleted shop­ping com­plexes se­cured com­mend­able oc­cu­pancy.

Jo­hor was lead­ing with nearly 2.82 mil­lion sq ft fol­lowed by Se­lan­gor (1.17 mil­lion sq ft), Kuala Lumpur (1.01 mil­lion sq ft) and Pe­nang (778,833 sq ft).

Kuala Lumpur ex­pe­ri­enced a mar­ginal de­cline in oc­cu­pancy rate to 85.3% (2016: 86.8%). The oc­cu­pancy rate in Jo­hor and Pe­nang im­proved 79.9% (2016: 73%) and 72.6% (2016: 69.9%), while Se­lan­gor sta­bilised at 85.4%.

The pur­pose-built of­fice build­ing seg­ment recorded a slightly bet­ter per­for­mance last year than in 2016. The over­all oc­cu­pancy rate stood at 83.3% (2016: 82.3%) with a high take-up of more than 8.29 mil­lion sq ft (2016: 3.07 mil­lion sq ft).

Kuala Lumpur ranked first with more than 4.09 mil­lion sq ft, fol­lowed by Se­lan­gor (1.84 mil­lion sq ft), Sabah (935,437 sq ft) and Pu­tra­jaya (719,621 sq ft), sup­ported by the high oc­cu­pancy rate in the newly com­pleted build­ings.

The take-up rate of new launches is im­prov­ing. There­fore, the prospects for 2018 will be bet­ter than 2017. Nordin Da­harom

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