PROPERTYGURU Malaysia country manager Sheldon Fernandez says a total blanket crash across the entire industry is unlikely.
He told NST Property that unlike other countries, the Malaysian property market is relatively stable, with little dramatic upward or downward price movements.
“Indeed, we have an overhang situation of high-rise homes that can be considered unaffordable. But there are still sub-niches within the property market that are doing well — landed homes in the suburbs.
These continue to see strong sales.
“Properties in niche locations, TRX and Bandar Malaysia, will also likely do well. Transit-oriented developments, if designed and planned correctly, should also see strong interest.
“We may see high-rise homes that have been on the market for a long time being re-priced, though large discounts are unlikely. A large number of Malaysians who have purchased these properties will continue to hold these properties and they have the holding power.
“As proven in the past two years since 2015, prices have dropped, but there has been no crash. Of course, there will be some hard-pressed owners who may throw prices to cut losses, but most we believe will have the power to hold,” he said.
Fernandez said the fact is, property investment has the advantage of being a short- or long-term play.
He said if prices are not favourable in the short run, one has the option to hold to his or her property for longer-term gains when prices eventually recover.
“The property market, like other markets, is cyclical and will recover sooner or later. As long as one has the holding power and has not over-leveraged his or her property purchases, it doesn’t necessarily spell disaster. You can rent the property out to tap the growing rental market, you can stay in it. There are still options.”
Fernandez said developers who continue to supply properties that are unaffordable will be hard-pressed to find buyers.
"Those who adjust to the new norms and cater to the pockets of demand that are still in existence will do well,” he said.
“Branded developers who are developing strata communities in the suburbs, that is 20-40km away from the city centre, and those who also supply smaller units in the city centre that are close to the MRT (mass rapid transit) and other rail lines are also likely to see strong performance,” he added.
Based on data collected by PropertyGuru, the large segment of consumers, or at least 36 per cent, are targeting properties priced between RM300,001 and RM500,000. These are typically high-rise homes in the city centre and landed homes further away in the suburbs.
Fernandez said according to the data, he foresees 2018 to be a marginally better year.
“Consumer sentiment has improved. Accepting market realities, they are more willing to transact. Asking prices have also stabilised after falling almost consecutively on a quarterly basis for almost two years.
“There is a sub-market consisting of landed homes in the suburbs that continue to do well. There are mostly the high-rise homes, where we are seeing a glut or overhang in supply. Even here, there are many locations still doing well, especially those close to MRT stations.
“Looking at external factors, GDP (gross domestic product) growth is expected to improve for this year compared to 2016. Oil prices have also rebounded to around US$63 per barrel and are expected to be sustained for 2018 barring any unforeseen circumstances,” said Fernandez.
He added that developers will continue to offer attractive packages to entice buyers.
But the issue of unaffordability and tight financing remains, which may be compounded if the Overnight Policy Rate is raised next year, he said.
“So, 2018 is likely to see some improvements, but don’t expect a dramatic transformation as long as unaffordability persists and wages come under pressure due to rising living costs, a weak currency and inflation,” added Fernandez.