Property Market Remains Positive in 2018

According to the PropertyGuru 2018 Property Outlook Forum, 2018 will likely be another challenging year for the real estate sector.  Even though overall consumer sentiment has improved and asking prices have come down, the key reasons of price unaffordability are caused by high-rise homes, rising living costs, tight financing and other factors. These factors will have a dampening effect on the overall momentum in 2018.

“Higher GDP does not necessarily mean higher wages and disposable incomes. Properties remain out of reach for many Malaysians due to the gap between asking prices in both the primary and secondary markets and consumer affordability. A twin-prong approach is required to expedite supply of affordable homes as well as improve wages to ensure more Malaysians can secure homes,” stated Sheldon Fernandez, Country Manager for PropertyGuru Malaysia. For 2018, properties are expected to remain unaffordable at 4.4 times the median income in Malaysia. The number would be even higher in key urban locations such as Kuala Lumpur and Penang.

The forum brought together a distinguished panel of leading industry experts who shares their insights on the property sector’s prospects for 2018. During the event, the PropertyGuru 2018 Property Outlook Report was also launched, providing comprehensive findings of the property market performance in 2017. Some of the key findings include price movements, supply of properties over the past 12 months as well as emerging trends for 2018 and potential developments in the year ahead.

Asking Property Prices

For 2018, asking prices of properties will remain stable with the possibility of marginal drops for real estate in KL, Selangor and Penang, while the Johor property market could possibly buck this trend and continue to see price appreciation.

Improving Supply of Affordable Homes

One key finding is the possibility of making it compulsory for developers to build affordable homes in their projects, similar to statutory requirements for Bumiputera homes. This will have a significant impact in improving supply of affordable homes.

Improving Consumer Sentiment and New Property Hotspots

It has been predicted that the market will see gradual improvement in overall consumer sentiment, barring any major external factors. The property market will also receive impetus from interest in landed, suburban properties located some distance from the city centre.

Emerging hotspots such as Rawang, Shah Alam North, Setia Alam, Ijok, Semenyih, Kota Kemuning and others will continue to drive momentum in the property sector. These properties, largely purchased by family owner-occupiers are expected to see decent uptake in 2018, provided buyers can secure financing and developers provide an attractive lifestyle concept that meets the aspirations of this sub-market of buyers.

Changing Norms and Values: Malaysians Renting Rather Than Buying

The rental market is expected to grow in importance as due to unaffordability, changing lifestyle perceptions and other issues. In the next five to 10 years, the rental market may become just as crucial to the property market as the buy and sell market. The traditional belief of owning a home will be significantly challenged and all stakeholders are advised to take note of this trend.

It has been suggested that the government should make a move to better regulate the rental market, but with further clarification and details. Due to this, more rental schemes are expected to emerge in 2018 and beyond.

Additionally, other findings drawn from the PropertyGuru Outlook forum includes:

  • Interest rates to be reduced or at the least maintained for home loans
  • Plot ratios to be increased so developers can build more units. This will allow for optimised land usage and lower unit costs with savings passed on to buyers.
  • Compulsory implementation of IBS by 2020 is expected to increase productivity by 2.5 times. The cost of construction is also expected to reduce by 5% to 6%.
  • Revision to gross income for loan application approvals.
Previous articleBrick and Mortar to a Digital Company
Next articleFirst Money Provider to Offer O2O Model Emerges

LEAVE A REPLY

Please enter your comment!
Please enter your name here