Malaysia - Housing

[winston]

Developers neutral to pessimistic on Malaysian property market By P. ARUNA

PETALING JAYA: Developers are generally neutral to pessimistic on the prospects of the local property market, given the increasing costs and the rising number of unsold properties.

In the first half of this year, property sales fell 9% compared with the same period last year, according to the Real Estate and Housing Developers Association’s (Rehda) latest Property Industry Survey.

For the period under review, 10,877 units were launched, of which 10,550 were residential units, and only 4,373 or 40%, were sold.

The best-selling property type were the double and triple-storey units while sales of apartments and condominiums were dismal, with only 779 of the 4,259 units launched, sold.

Rehda president Datuk Seri Fateh Iskandar Mohamed Mansor said at a press conference: “The take-up rate was not even 50% for the apartments and condominiums, while landed property were most popular with double and triple-storey units making up more than half of the total units sold.”

The Rehda Property Industry Survey 1H 2015 also revealed that the number of unsold units rose to 78% in the first half of this year from 64% in the first half of 2014 – a 14% increase.

The unsold units were mostly in Kedah, Penang, Selangor and Johor, and mainly in the RM500,000 to RM1mil price range.

“Unreleased bumiputra lots and loan rejections by banks were the top reasons for the unsold units,” Fateh Iskandar pointed out.

Loan rejections increased to 35% from 29% in the previous half, with most involving residential property priced between RM250,001 and RM500,000, followed by those between RM700,000 and RM1mil.

These were mostly due to ineligibility of income, lower margin of financing offered by banks and buyers’ credit history.

Many banks, he added, were only offering between 75% to 80% loans, which made it difficult for buyers.

To make things worse, Fateh Iskandar said costs for developers were increasing, with 71% of the respondents saying costs had gone up by up to 11%, due factors including the goods and services tax (GST).

“Almost all repondents indicated that GST had increased the overall cost of doing business. Most said the tax had pushed up costs by up to 5%, and this in turn has pushed up house prices.

“Due to the weakening ringgit, certain materials which are still imported like lifts, escalators and some air conditioners are becoming more expensive,” he added.

However, he said, it was too early to tell how much the weakening ringgit had impacted developers.

Two thirds of the developers said GST had caused property prices to rise, and 22 of them said prices went up by over 5%.

The other 67% said they had absorbed the increase, at least partially.

“Most respondents are neutral to pessimistic on the outlook for the next half of the year.

“However, we anticipate that the level of pessimism will reduce in the following six months as developers get accustomed to the impact of the GST,” he said.

The survey also found that an increased number of new property priced below RM200,000 were launched in the first half, and less property in the RM200,001 and RM500,000 bracket.

Half of all the property launched were priced below RM500,000.

“Property priced below RM200,000 has actually gone up, from just 5% of all new launches, to 14%,” he said.

Property in the RM500,001 to RM1mil bracket also jumped from 34% to 42%.

“The biggest chunk of property price is still between RM200,001 and RM500,000, although the number of units dropped,” he said.

In Kedah, Pahang, Negri Sembilan and Perak, most of the property launched were in the RM200,001 to RM500,000 range, while in the Federal Territory, Selangor and Malacca, prices were between RM500,001 and RM1mil.

In Kelantan, where there was a surge in condominium units, prices moved from below RM200,00 in the previous half to between RM200,001 and RM500,000.

New projects in Johor and Penang jumped from being mostly between RM200,001 and RM500,000 to the RM500,001 to RM1mil range.

“Prices of new units in the Klang Valley have remained in the same range for the past five halfs, and has not been rising fast as perceived,” he said.

According to the survey, prices of residential property in the Federal Territory will surge between RM1mil and RM2mil during the second half this year from between RM500,000 and RM1mil during the first half.

In Selangor, Johor, Penang and Negri Sembilan, average units prices will remain between the RM500,001 and RM1mil, according to the survey.

Prices in Pahang, Perak, Malacca and Kedah are expected to stay in the RM200,001 to RM500,000 range, while prices in Kelantan are set to jump from below RM200,000 to between RM200,001 and RM500,000.

Source: The Star

[winston]

Buying Malaysia property? Here's some tips

by Lydia Lam

Source: My Paper

http://business.asiaone.com/news/buying ... fEjt6.dpuf

[winston]

Good news for renters, not so much for buyers

BY SHAHANAAZ HABIB

Source: The Star

http://www.thestar.com.my/News/Nation/2 ... or-buyers/

[winston]

Secondary property sales may take lead in Malaysia

BY EUGENE MAHALINGAM

SUBANG JAYA: The ongoing slowdown in the local property sector could see transactions in the secondary property market overtaking that of the primary market.

Citing data from the National Property Information Centre (Napic), PPC International Sdn Bhd managing director Datuk Siders Sittampalam said the economic slowdown has affected transactions in the primary property market this year.

“Total volume of transactions in the primary market has dropped, and this has also resulted in values dropping.

“As such, there will come a time when the secondary market will lead the primary market,” he said at a press conference after the launch of the 25th National Real Estate Convention (NREC) 2015 yesterday.

Siders said it was difficult to provide a specific timeline on when he expected transactions in the secondary market to exceed that of the primary market.

“In terms of value, the primary market will find it harder to match the secondary market due to rising land and building costs,” he said.

Siders said he expected transactions in the primary market to improve once cooling measures imposed on the local property sector have been relaxed.

“Once the economy picks up and Bank Negara backs off on its cooling measures, the primary market will pick up again.”

He also said a drastic hike in interest rates will have an impact on the property sector.

“Over the last few years, the property market had been steadily growing due to various measures such as the developers interest bearing scheme (DIBS). Because of these measures, pricing in the market has been distorted.

“Now, when people have committed to their loans, especially youths and first time buyers, and there is a sudden hike in interest rates, there will be a dip in the market.

“Loans go bad and many properties will go under the hammer. This will not be a healthy market.” Siders said he was hopeful that any interest rate hike by the central bank would be a “sustainable increase.”

Bank Negara maintained its overnight policy rate in September at 3.25%.

The NREC was organised by the Royal Institution of Surveyors Malaysia and the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia.

The event highlighted major concerns for the future of the real estate industry in Malaysia during the current economic period.

Source: The Star

[winston]

Why house prices remain high

Selangor and Kuala Lumpur have a population of 7.5 million with 1.85 million residential units. Migration from other states and foreign purchases will enhance demand.

There are some 30 broad factors which affect prices. Each of these can be further broken down, but fundamentally, it boils down to just demand and supply.

“Property is always about the location. This is then further divided into proximity and distance to the city centre. Usually, areas nearer to the city centre will have better accessibility and are able to fetch better prices

The second factor is interest rates. “There is an inverse relationship between interest rates and property prices,”

Source: The Star

http://www.thestar.com.my/business/busi ... ?style=biz

[winston]

Experts predict ‘flat year’ for Malaysia’s property sector in 2016

By By Ida Lim

Source: The Malay Mail Online

https://sg.news.yahoo.com/experts-predi ... 00484.html

[winston]

Challenging property sector

Source: The Star

http://www.thestar.com.my/business/busi ... ?style=biz

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Factors affecting prices BY EUGENE MAHALINGAM

Looking ahead, property consultancy VPC Alliance (KL) Sdn Bhd managing director James Wong expects 2016 to be more subdued than this year.

Wong says most developers have launched their products aggressively in 2014.

The full impact of the expiry of the developers’ interest bearing schemes (DIBS) will be felt next year.

Under DIBS, property buyers need not service the loan until the property is completed. Introduced in 2009 as an incentive, speculators purchased multiple units under DIBS because of the initial low outlay.

He expects to see softening demand in the high-rise high-end residential sector in the central region of the Klang Valley in 2016.

Landed residential property demand is still resilient, especially with the gated and guarded community concept.

“We believe that the outlook for property price is better in Greater KL (Selangor and KL) due to support from the urbanisation factor.”

Citing Bank Negara statistics, the research house also noted that demand for property loans declined 13% year-on-year in October 2015 to RM25.19bil.

“This was weaker than September 2015, which declined 9% year-on-year.

“Year-to-date October 2015, loans were lower by 7% year-on-year to RM253.88bil.

Source: The Star

http://www.thestar.com.my/business/busi ... ?style=biz

[winston]

2016 will be “the worst year for Malaysian property”, says expert

“Demand is low in the sense that there is lower foreign investment and job creation, lower purchasing ability from Malaysians, as well as the poor economic and political situations,” shared Tee.

A bigger dilemma is the high loan rejection rates, which stands at over 50 percent for KL-based properties and 80 percent for Iskandar-based properties.

Source: Property Guru

http://www.propertyguru.com.sg/property ... ign=buffer

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Q: Will the condominium market be priced from RM650 per sq ft?

No. But it will be an extremely tough year for this segment of the condominium market.

The market is not expected to see the light even by the end of 2016 because of the sheer over supply.

According to the National Property Information Centre (Napic), there is an existing stock of more than 520,000 units of high-rise residentials (condominiums and serviced apartments) in the three main regions of the Klang Valley, Penang and Johor at the end of the third quarter of 2015 with an incoming supply of about 227,400 units for the same period. There is a planned supply which has already been approved by the authorities in the respective areas totalling 127,100 for the same period.

There are a lot of condominiums and apartments in the secondary market selling below market price today and this situation is not limited to the Kuala Lumpur City Centre where the country’s most high-end units are located.

Because of the sheer volume, a lot of these units will remain vacant, or owners will have to rent them out below their monthly mortgage payments.

Some may decide to cut sell below market value.

Prices of high-rise residentials are expected to drop at a minimum of 10% next year but a collapse is unlikely.

Source: The Star