KUALA LUMPUR: The property and real estate market for Malaysia in 2019 will remain challenging across all property sectors, says CBRE | WTW managing director Foo Gee Jen.
Speaking to the media during its 2019 Asia Pacific Real Estate Market Outlook Report today, Foo said industrial properties however remain as a bright spot amidst the sluggish property outlook in 2019.
“Since the change in government and a new era, where we are expecting higher level of governance, so there will be more systematic and planning for townships built in addition to proper infrastructure to go with it.
“We have experienced slower property market since the last few years and this will remain more or less the same this year, but we hope this year the economy will grow faster and cost of living will decrease while consumer spending rises.
He said public transportation location is important so that transportation spending will not drain the pockets of the people and this will help increase domestic spending.
Property overhang amounted to about 30,000 units in 2018 with take up rates for unsold units of high-rise residential and high-end products are extremely slow.
Tenancy rates for retail spaces have also seen oversupply and tenants have switched to month-to-month rental rather than a long-term leases, signalling a more dynamic rental scheme in retail sector.
The vacancy rate in Johor Bahru for its high-rise residences are also expected to be above 50 per cent for the first time in 2019.
Meanwhile, Foo said the government's plan to build one million units of affordable homes within the next 10 years can be achieved despite it being seen as a tall order.
“The previous government’s aim to build 1 million affordable homes within 5 years fell short of its target where only 20 per cent were able to be built.
"I do have hope with the new government as the aim seems more practical and is over a 10-year period," Foo said during a press briefing.
The Housing and Local Government Ministry recently announced intention to build one million units of affordable homes within the next 10 years to enable more people, especially the low income earners, to be house owners.
It aims to build 100,000 units of houses a year beginning this year.
"I believe 100,000 is more practical in terms of development. But we do need to get the housing policy right. We should not put this entirely on the private sector because if it is fully driven by them then there would be heavier cross subsidy to the M40 group," he added.
Foo, however, highlighted on the government putting too much emphasis on the B40 group to garner more votes.
"What would happen to the M40 group? If there is too much cross subsidy then the M40 will suffer and they too will not be able to afford homes," he said.
He added that state governments could also assist in offering their resources such as land.
"There's still a lot of land bank in many states where as land is a scarcity here (in Klang Valley). It would be good if the states could offer their land at cheaper prices to be put to good use," he said.
Foo said location is the most important factor even for affordable housing, citing that the 10,000 homes built in Bukit Beruntung, where demand has dwindled, now seen as a “ghost town”.