Business

Property market to remain subdued next year

Syndicated News
Written by Syndicated News

KUALA LUMPUR — December 1, 2016: The property market is expected to remain subdued in 2017, mired by issues such as affordability, high rejection of loan applications and macro-economic issues like rising living costs and smaller growth in incomes.

The Real Estate and Housing Developers’ Association Malaysia (Rehda) expects the challenging trend from last year, which saw a significant drop in property offerings, to continue into at least in the first half of next year.

“We do not see any improvement at least until in the first half of 2017,” Rehda president Datuk Seri Fateh Iskandar Mohamed Mansor said at the PropertyGuru 2017 Outlook Forum here today.

The weak property market had seen the volume of property offerings decline by 30 per cent in the third quarter of this year compared to the same period last year.

Sales also declined significantly to about 30 per cent of the offerings in the first half of this year, from 52 per cent in the same period last year.

The country manager of online property portal PropertyGuru Malaysia, Sheldon Fernandes, said that with the completion of many new projects next year, the market was expected to remain flattish to marginal decline next year.

Difficulty in obtaining loans is another barrier in property ownership, as evidenced by the drop in loans approval to 42 per cent this year from over 50 last year.

However, this would gave way to the growth of the rental market.

“The market continues to have its bright spots, with the rental market expected to remain strong, fuelled by a growing young, first-time buyers who, in deferring their home purchase decision, would look to the rental market while continuing to save for their future home,” said Fernandes.

Fateh Iskandar also would like the government to open up the full loan scheme for Perumahan Rakyat 1Malaysia (PR1MA) houses, announced in Budget 2017, to private developers who build affordable houses priced at RM300,000 and below.

He said private developers could complement Perbadanan PR1MA Malaysia in areas the agency is unable to
go to.

“Rehda members are from Perlis to Sabah. We can help build PR1MA houses in areas where Perbadanan PR1MA Malaysia can’t go.” — Bernama

 

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