In­dex: Prop­erty prices set to drop fur­ther in 2017

The Sun (Malaysia) - - SPEAK UP -

PE­TAL­ING JAYA: Prop­erty prices are ex­pected to drop fur­ther in 2017 on the back of un­re­solved is­sues in home pric­ing, high re­jec­tion of loan ap­pli­ca­tions, ris­ing liv­ing costs and lower in­come growth, ac­cord­ing to the Prop­er­tyGuru Prop­erty Price In­dex.

Av­er­age ask­ing price could see a fur­ther drop of RM35 to RM40 per square foot (psf) in 2017, par­tic­u­larly in the high-rise seg­ment which is fac­ing an over­sup­ply.

“Homes priced be­tween the RM500,000 and RM700,000 are likely to see the most num­ber of loan re­jec­tions and hence slower sales,” said Prop­er­tyGuru coun­try man­ager Shel­don Fer­nan­dez.

In the mid­dle of 2016, av­er­age ask­ing price was RM554 psf, down from RM586 psf a year ago, shared Prop­er­tyGuru.

“Based on the com­bined data from the Prop­er­tyGuru Prop­erty Price In­dex and of­fi­cial sta­tis­tics, 2017 is ex­pected to be an­other slow year for the prop­erty mar­ket. With the com­ple­tion of many new de­vel­op­ments flood­ing the mar­ket in 2017, there is likely to be a drop in sell­ing price due to the lack of de­mand; and some may be mo­ti­vated to move their units quickly due to their lack of hold­ing power,” he said.

How­ever, Fer­nan­dez pointed out that landed prop­er­ties at strate­gic lo­ca­tions could main­tain their val­u­a­tions or even see mar­ginal price ap­pre­ci­a­tion.

On the bright side, the rental mar­ket is ex­pected to re­main strong, fu­elled by a grow­ing pool of young and as­pir­ing first-time home­buy­ers who may de­fer their home-pur­chase de­ci­sion.

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