Property market in 2018 – bad or super bad?

When you ask how is the property market doing, the answer depends on who you ask. We did some online search and here are the snippets of info.

[SENTIMENT: NEUTRAL] PropertyGuru 2018 Property Outlook Report

  • Market is still correcting itself, with a steady downward trend.
  • Marginal drops in real estate prices in Kuala Lumpur, Selangor and Penang.
  • Emerging hotspots, such as Rawang, Shah Alam North, Setia Alam, Ijok, Semenyih and Kota Kemuning, are expected to continue gaining momentum.

[SENTIMENT: NEGATIVE] Real estate veteran, Ernest Cheong

  • Property market will take a terrible hit next year, with developers and house owners facing one of the toughest times to find buyers.
  • It could lead to a market crash as consumers do not have the financial capacity to own homes with some failing to even pay their monthly instalments.
  • “There should not be any urgency to buy a property at the moment. Try renting first.”

[SENTIMENT: POSITIVE] Henry Butcher Malaysia chief operating officer, Tang Chee Meng 

  • Market was sluggish and stock of unsold houses could possibly increase in 2018.
  • Some projects priced under RM500,000, as well as those above that price range in popular locations, were still enjoying good take-up rates.
  • “So for anyone to say that the market will crash next year is a bit too pessimistic.”

[SENTIMENT: POSITIVE] Penang Real Estate and Housing Developers’ Association’s immediate chairman, Jerry Chan

  • Unlikely for developers to drop their prices unless they are in financial trouble.
  • The demand for housing would continue to persist and that consumers would always find ways to buy a home, whether through finding additional income sources or lowering their expectations of a home.
  • Dismissed the likelihood of a crash in 2018, citing strong exports, returning investor confidence, and the lack of mass retrenchments.

[SENTIMENT: POSITIVE] Real Estate and Housing Developers’ Association (Rehda)

  • Optimistic of Malaysia’s property sector outlook in the first half of 2018 (H1 2018) in tandem with the improvements in the country’s economic conditions.
  • Its president, Datuk Seri FD Iskandar, said the optimism was also based on forecasts of a stronger gross domestic product growth by Bank Negara Malaysia and economists.
  • Majority of the respondents of the property industry survey (for H1 2017 and market outlook for second half of 2017 and H1 2018) were neutral towards the industry outlook.

[SENTIMENT: POSITIVE] iProperty.com CEO for Malaysia and Singapore, Haresh Khoobchandani

  • Malaysian property market is seeing growth and improved sentiment compared with the previously “quiet market” plagued by issues related to loans and access to funds.
  • In terms of market trends, affordable housing is driving the market with more units, as more developers shift focus towards the segment in order to meet market demand.
  • “If you look at the recent results that came through for a lot of the developers, their results were strong, very positive.”

[SENTIMENT: POSITIVE] Independent economist Azrul Azwar Ahmad Tajuddin

  • It would take something on the scale of the 1998 Southeast Asian financial crisis to trigger a property crash.
  • The government’s House Price Index (HPI) from 1989 to the first half of 2017 indicated that the country had been spared the devastating impact of property crashes, except for 1998 and 1999.

[SENTIMENT: POSITIVE] Socio-Economic Research Centre (SERC), Lee Heng Guie

  • “A possible sharp slide in property prices is a good opportunity for first-time home buyers to consider buying a house.”
  •  Even if prices dropped, houses in good locations, with high investment value would not depreciate as much as expected.
  • House prices are not expected to fall sharply in 2018 as there are no stress signs indicating a sharp correction in the property market, which has been consolidating in recent years.

[SENTIMENT: NEGATIVE] Economist Carmelo Ferlito

  • Bank Negara’s lending rates and the property market’s business cycles had created a housing bubble of unsold homes.

[SENTIMENT: NEUTRAL] RAM head of agribusiness, real estate and construction ratings, Thong Mun Wai

  • Residential property sector received a revision by RAM Ratings  in its outlook for 2017/2018 – from negative to stable, premised on the expectation of a slow but gradual pick-up in market activity after the lull of the last several years.
  • Expects overall loan growth for the banking sector to remain flat at about 5 per cent to 6 per cent in 2018.
  • Malaysia’s real GDP growth is projected to maintain a steady clip of 5.2 per cent in 2018, following the expected 5.4 per cent expansion this year.

[SENTIMENT: NEUTRAL] Knight Frank Malaysia managing director Sarkunan Subramaniam

  • Sees rise in KL prime office rental for next 3 years, attractive for MNCs.
  • More skyscrapers are completed over the next three years, raising the benchmark of premium grade office space in the city.
  • By 2020, the iconic PNB Warisan 118 Tower and Exchange 106 in Tun Razak Exchange will be completed, and the Permodalan Nasional Bhd group of companies will occupy 60 floors of the RM5 billion 118-storey tower, which will be the fifth tallest building in the world.
  • Leasing out prime office space takes time, up to two years for 200,000 sq ft to 300,000 sq ft office space.
  • Prime office rental in Kuala Lumpur is expected to increase 2.5% over the next three years, ahead of Beijing and Shanghai, according to the “Global Cities: The 2018 Report”.

 

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