DOES anyone know which segment of the property market (high- or low-end property) is likely to do well this year?
The truth is, no one is able to predict what the future holds or how the market will perform in the next nine to 10 months.
The important question is, who is buying, what are they buying and where are they buying?
Data by the National Property Information Centre revealed that there were 130,690 unsold residential properties in the country during the first quarter of last year — a record in 10 years!
The unsold units included overhang units (completed, but unsold; under construction, but unsold), small office home office and serviced apartments. A majority of the unsold units were above RM250,000.
Despite that, property developers are still launching new projects in the hope that they will be able to achieve their sales target.
According to real-estate consultancy firm Knight Frank Malaysia, cumulative supply for high-end residences and condominiums in areas such Kuala Lumpur city, Mont Kiara/Hartamas, Ampang Hilir/U-Thant and Bangsar/Damansara Heights is forecast to increase in the first half of this year.
In the second half of last year, there were several completed high-end residences and condominiums that would add to the cumulative supply.
RHB Research Institute analyst Loong Kok Wen said in a research note in January that the property market may only have a meaningful recovery in 2020, with some mini-cycles in-between.
This is because of the weak sentiment on oversupply and potential rate hikes, Loong said.
In an increasingly competitive market, smart developers have started to look at new ways of marketing their properties.
One method is content marketing, which involves the creation and sharing of online material (videos, informative blogs and social media) to stimulate interest.
DULL MARKET IN THE FIRST HALF
According to Knight Frank Malaysia, the property market, which has been volatile in the past few years, is expected to remain lacklustre in the first half of this year.
This is amid flagging demand ahead of the general election, the firm said in its research report entitled “Real Estate Highlights for 2nd Half of 2017”.
The report looks at the market performance across various property mix — residential, office and retail — and highlights the trends and outlook in key markets, namely Kuala Lumpur, Klang Valley, Penang, Johor Baru and Kota Kinabalu.
Knight Frank said the sluggish property market this year follows the weak oversupplied position in the second half of last year.
Knight Frank Malaysia managing director Sarkunan Subramaniam said the second half of last year saw developers shifting their focus to the middle-income and affordable housing segments to cater to a wider target catchment amid challenges in the high-end market.
In the Penang property market, the condominium sub-sector is still consolidating while the retail sub-sector is expected to face further challenges. This is due to additional incoming supply entering the market next year.
The Johor property market is expected to do better, supported by notable developments and catalytic projects in other sectors such as the Coastal Highway Southern Link, Pengerang Integrated Petroleum Complex and the golf course in Desaru coast.
Knight Frank said these projects are expected to help support the growth in residential, commercial and retail sub-sectors in Iskandar Malaysia, Johor Baru.
The good thing about the Johor property market is that some developers are postponing new residential launches while clearing existing stocks by offering attractive discounts and incentives.
The move by the Johor developers is poised to spur demand for properties in Johor Baru city centre like Tropez Residence @ Danga Bay, Paragon Residence @ Straits View and Setia Sky 88.