Efforts to rein in Malaysian
DESPITE the various measures by the government to make housing more affordable, house prices continue to rise, although at a more gradual pace, participants at the “Post-Property Market Report 2016 dialogue” were told.
The introduction of tighter lending conditions to remove speculation, the offering of various affordable housing schemes at national and state levels and government subsidies have not resulted in making housing affordable for the masses. The introduction of the mass rail transit (MRT) and the development of high dense housing near these amenities, while convenient, has come with a price beyond the reach of most.
Public officials including surveyors and valuers attending the one-day dialogue on April 19 entitled “Property Market Performance in Challenging Times” were at their wits’ end.
Said an official: “I don’t know how this can be resolved. Prices [although at a more gradual increase than a few years ago] are getting higher.”
The interest in the sector by both public and private sector, the prolonged soft property market, long standing affordability issues and the short supply of affordable housing have spurred much interest.
It was against this backdrop that the event was organised for the first time by the Sports Club of Valuation Department (Kesupen) and the Malaysian Public Sector Valuers Association (Penilaisama). It was held a day after the Valuation and Property Services Department (JPPH) launched the Property Market Report 2016.
The dialogue allows participants to hear directly and to seek clarifications from the very people who make the report possible.
JPPH’s deputy director-general (operations) Zailan Mohd Isa gave a broad sweep of the overall market and touched on three main sectors – residential, office and retail sector.
Her key takeaways are:
lThe property market is expected to remain soft for 2017;
lNew properties have to compete with the secondary market, where buyers deal directly with house owners, in terms of the right pricing and right product;
lPrices to see gradual growth going forward;
lIncentives would continue to support the residential market; and
lThe game changers are the MRT, the Kuala Lumpur-Singapore high-speed rail and the East Coast Rail Line which connect the city to the east coast.
Although there was much focus on the residential segment as housing continues to be the main driver of the property market, there were also much concern regarding the office space and retail sector.
National Property Information Centre (Napic) deputy director Aina Edayu Ahmad says all states saw a downtrend in the commercial property market. She says while the residential sector is all about ownership, commercial properties are about business sentiment.
“Every state has average occupancy of about 70 per cent, or a vacancy rate of about 30 per cent in the office space sector. So it is worrisome,” Aina says.
Referring to the Malaysian House Price Index which includes all types of residentials, Napic director Khuzaimah Abdullah says double-digit growth – seen in 2011 right until 2013 – are not sustainable. From 2013 onwards until the third quarter of 2016, annual growth rate was between 7 per cent and 9.6 per cent, which is still high. It was only in the last quarter of 2016 that saw growth at 5.5 per cent.
