Prices of Malaysian houses will not be going down anytime soon so those looking for a good deal should just buy now, a national body representing local developers said today.
Real Estate and Housing Developers’ Association Malaysia (Rehda) president Datuk Seri Fateh Iskandar Mohamed Mansor said prospective housebuyers cannot count on property prices falling significantly despite a softer property market.
“A lot of people have asked me ‘So when is it going to fall? When can I get a good deal?’ I’m telling you now is when you are getting a good deal,” he said at a forum on the outlook for the Malaysian property market in 2017.
“Look at what you can afford, do your homework, but if you think the prices are coming down, the answer is no. There’s no such thing as (prices) coming down.
“It’ll come down a little bit, but at the end of the day, it will go up a lot more than it will come down,” he added, having noted earlier that those who cannot afford to buy housing property should rent instead.
Fateh Iskandar said property developers still need to sell off their units, noting that many of them may not offer lower prices but have already been “going the extra mile” by offering free items such as cabinets and air conditioners.
While developers still need to “survive” and ensure they have sufficient cash flow, he noted that they are better funded than in the past.
“For us, especially those who are carrying huge loans, we need to pay off the loans and we have to be realistic. The only difference is today developers are more well-funded compared to the days of 1998, 1999 during the Asian Financial Crisis,” he said.
Earlier, Fateh Iskandar said this year remained challenging for property developers who are now facing global economic uncertainty and a weaker ringgit, also noting the National Property Information Centre’s statistics for 2016’s third quarter with the number of property transactions down by about 14 per cent and transaction value down by over 12 per cent when compared to last year.
“Property prices have remained flat this year and we do not see any improvement at least in the first half of 2017,” he said.
Even for Rehda’s half-yearly survey among its 1,400 members, Fateh Iskandar said less of them had opted to join the survey in the last 18 months as they either had no new property launches or had scaled back their launches.
“In our first half for 2016, respondents reported a significant decrease in sales performance from 52 per cent a year ago to about 30 per cent this year,” he said.
Property portal PropertyGuru Malaysia country manager Sheldon Fernandez, who was moderating the same forum, said that the average asking property prices in Malaysia had largely remained stable from mid-2015 to mid-2016 with little changes, where it dipped from RM586 per square foot to RM554 per square foot.
This is mainly due to factors such as affordability problems with the high price of housing properties, challenges for housebuyers to secure financing and rising living costs, he said.
In a press release, he also said that PropertyGuru’s Property Price Index shows that property prices may drop by a further RM35 to RM40 per square foot next year.
“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 in the statement.
With high housing loan rejection rates particularly among first-time housebuyers, he predicted that many will choose to rent instead as they will have greater bargaining power with the high number of rental property available.
“2017 is still expected to be a renters’ market with many expats leaving the country with the subdued oil and gas industry,” he said at the forum.
PropertyGuru’s 2017 Property Outlook Forum today also featured Khazanah Research Institute’s managing director Datuk Charon Mokhzani, Jones Lang Wootton property consultancy’s executive director Prem Kumar, Smart Financing CEO Gary Chua and property lawyer Chris Tan.