KUALA LUMPUR: Property buyers should hold off on purchases until at least next year to enjoy lower prices as cooling measures implemented by Bank Negara Malaysia set in.
Prices have stayed stagnant and the property market slowed somewhat in the last year, indicating that tighter lending rules and related measures are achieving their desired impact.
National House Buyers Association (HBA) secretary-general Chang Kim Loong said property buyers should wait as the cooling measures were working well.
Prices have gone down and are expected to reduce further.
“Do not buy new property this year. There is still the secondary market and auction properties that can be considered at cheaper prices,” he said after speaking at the forum, themed “Does Greater Prosperity Come With Less Housing Affordability?” here, yesterday.
Before the central bank’s cooling measures, property prices were on a steep climb, particularly in key markets, believed to be spurred by excessive speculation.
Chang said the investors club were now rushing to sell their properties at lower prices as there were no takers, and predicted “many foreclosure cases soon due to this”.
He said new properties were not only more expensive but also developer-controlled, despite the lower construction costs.
Chang said HBA had forwarded several recommendations to the government ahead of the 2016 Budget announcement.
Among the suggestions were higher stamp duties corresponding to the number of properties owned, and making mandatory the Build-and-Sell scheme as decided in 2012 but was put on hold.
He said utility companies should also shoulder the cost and responsibility to construct water reservoirs and substations for residential developments.
“The utility companies are now corporatised, so they should not be factoring in the cost of such utilities onto the developers as this will in turn be factored into the house prices,” Chang added.
Meanwhile, Khazanah Research Institute managing director Datuk Charon Mokhzani said Kuala Lumpur and Penang had properties that were “seriously unaffordable” and the problem needed to be tackled fast.
“If the problem is not resolved, in addition to the low supply of affordable houses, other states may end up in the same ‘seriously unaffordable’ category in 20 to 30 years,” he said.
Charon said more affordable houses needed to be built, and this could be done by incorporating the Industrialised Building Systems.
“We should bring in new technologies that can reduce construction costs,” he said, adding that this could be encouraged with the proper incentives.
Charon also emphasised that using skilled workers could help reduce reliance on foreign workers as well as increase the industry wages.
“If we get this right, the economy can benefit from this. If not, the whole country could turn into the state Kuala Lumpur and Penang is in now,” he said.
The forum, organised by the Malaysian Economic Association, also featured speakers from the National Housing Department and Real Estate and Housing Developers’ Association Malaysia.