Index: Property prices set to drop further in 2017

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.