Gradual price rise deemed more realistic and sustainable

NATIONAL Property Information Centre director Aina Edayu Ahmad tells participants at the Housing and Valuation Conference 2019 that it is more realistic and sustainable to have prices gradually rise at less than 5% instead of the double-digit growth seen at the peak of the property market in 2012/2013.

Aina says that on a very broad basis, a double-storey terraced house in Kuala Lumpur is 2.6 times the price of a Johor unit, and twice the price of one in Sabah. (see chart)

If one were to zero in onto the exact location, the double-storey terraced in KL central is Rm1.12mil, the Gombak unit is RM460,891... the difference is wide.

In high-rise housing, the unit located in the city is 1.8 times that of Selangor, 1.4 times the unit in Penang, and 1.4 times the Sabah unit.

In both market segments, Kuala Lumpur’s prices are the highest, 5.4 times higher than a landed unit in Melaka.

But to be noted is Sabah’s high rise, which is on par with Penang’s.

Also Sarawak’s landed is on par with Johor’s.

“What determines the price of housing? It is supply and demand.”

Aina says the Home Ownership Campaign has helped developers to clear their unsold stock, but more importantly, it has helped those who wanted to own their own houses.

Sabah and Sarawak prices are rather high. How did prices in these two states come to this level?

Sabah’s high-rise housing is even higher than Sarawak’s.

At this rate, where is the demand going to come from, Aina asks.

Had the campaign included the secondary market, where buyers buy directly from house owners, that would have opened up the market further and this would have had a positive effect on the market, she says.

In view of the coming Budget 2020, she calls on real estate professionals to give their opinion collectively.

“This will help the government to implement a policy that is practical, progressive and and measurable.”