The Property Market Only Expected To Bounce Back In 2018
Due to the current sluggish economy, weak property market sentiment and also oversupply, the property market is only expected to recover in 2018.
According to James Wong, committee member of the Malaysian Property Summit Mid-year Review 2016, recovery is not anticipated in the second half of 2016, and the market is expected to be stable and flat next year.
Elvin Fernandez, the organising chairman of the summit, agreed with Wong, adding that residential market will not be as severely impacted as the commercial sector.
“There are still a lot of genuine buyers in the residential market looking for homes. Even if there are speculators in the market, there are not enough of them to overturn the market due to their small number as compared to genuine home buyers,” said Fernandez.
“However, in the commercial sector, we see continuous incoming supply of space such as in the office and retail sections. This has definitely placed some pressure on the rental market. Shopping centres may also face new challenges due to the decrease in consumer spending as the increase in income is not proportionate to the increase in the cost of living,” he added.
In the first quarter of this year, the market was noticeably quiet, said Wong.
The National Property Information Centre (Napic) recorded a slump in the volume and value of transactions in 2016 at about 14.4% and 17.9% respectively, compared to the same period in 2015 (Q1).
“Owing to the current weak property sentiment, developers have begun to come up with many innovative marketing strategies such as the developer housing loan assistance package, rebates and discounts, as well as bearing the legal fees for SPA and loans,” said Wong.
Due to the current conditions, it is even more important for quality information to penetrate the market for it to remain efficient, noted Fernandez.
The mid-year review organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the private sector of Malaysia (PEPS), will gather industry experts to provide in-depth discussions into various property topics and outlook.
“PEPS has, for the first time, decided to organise a mid-year review of the property market for Malaysia owing to the changing dynamics and to update participants about the actual situation today as well as to take stock and make recommendations on what can be done to ride the property storm,” said Wong to The Edge Property.
“We have lined up 14 distinguished speakers to cover all the pertinent subsectors, analyse the state of the local economy and how it will impact the property market and its direction. We will probably have recommendations on where and what the hotspots are and the types of properties to invest in with this slow market,” Wong said.