Property gurus are predicting that the property market will be dominated by sub-sale and auction properties in 2016.
As many developers defer launches due to uncertain demand, buyers would prefer properties that are ready to be immediately occupied. Ready-made properties will also give them room to negotiate prices.
Hit by cooling measures, falling commodity prices, rising unemployment and the weaker Ringgit, the property market is expected to remain “flat” until 2017.
When unemployment rises, many will find it difficult to service their loans and will have to liquidate their assets. Affordable homes are perhaps the most reliable choice, and would benefit mostly individuals in the lower income bracket.
As far as the property market is concerned, the most affected would be medium-income earners who are not eligible to buy low-cost houses, while PR1MA housing is still in the planning stages.
The challenge is not just finding a good property at below market value but also being able to qualify for loans. Getting housing loans approved has been a hassle since banks have introduced stricter lending requirements. Therefore, most property buyers would be turning towards sub-sale or auction properties.
The year 2016 looks to be another challenging year ahead for the property market, especially for the residential sector. The residential property market will continue its slow pace going into the first half of 2016 before recovering slightly in the second half.
The implementation of the Goods and Services Tax (GST) also impacted the property market as investors adopted a wait-and-see approach. Although residential properties are tax-exempt rated, investors are still cautious as they were uncertain about the direction of the property market post-GST.
The property market do not foresee any significant decline in transaction volume or any drastic drop in house prices in 2016. However, developers will make some adjustments to boost sales in a slow market, such as a refocus on landed homes, smaller units and affordable homes.
New upper-income households looking for new homes are slowly diminishing, while existing upper-income households are likely to postpone upgrading decisions or choose to invest offshore. With this, keen house buyers may have more opportunities to buy at below market value.