Property Market Stable and Moving Moderately, Says MIEA
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In response to the much speculation on the current property condition, the Malaysian Institute of Estate Agents (MIEA) has called for a press conference to offer its unbiased professional views collectively shared by its fellow Board of Directors, members and practitioners in the industry who are active in both the primary and secondary properties transactions.
According to its President, Eric Lim, the feedback and survey from its members and practitioners conclude that the market is rather stable and moving at a moderate pace. Our banking NPL is rather manageable and there has been no increase in fire sales reported thus far.
"The current property buyers are more savvy and prudent in managing their finances and investment," he said.
Appended below are the brief summary observed:
1. In today's knowledge-driven economy, purchasers and investors are savvier of the property market and careful in their decision making.
2. The purchasing interest level in the market is still high but is often dampened by the common frustration on loan issues. Most of the aborted transactions are due to either loan rejection or low margin of financing in both the primary and secondary properties.
3. There are approximately 2,000 Registered Estate Agents and 25,000 Real Estate Negotiators (REN) in the market which denotes a highly competitive playing field among the practitioners than ever before.
4. It is essential to embrace new technology in adopting an effective marketing approach in reaching out to the Gen Y and millennials target segments
5. The influx of foreign purchasers on the high-end market, especially on the high-rise condominium, is another rising avenue which practitioners should be leveraging and targeting on.
6. The market is expected to improve further after the general election.
The property market is affected by 3 significant factors, namely the country's economy, employment stability and the bank's lending.
1. Regionally, Malaysia's economy as measured by gross domestic product (GDP) grew 6.2% in the third quarter of 2017 (3Q17) from a year earlier, driven by domestic demand. Given the continued strong performance in the third quarter, the economy is on course to register growth that is close to the upper range of the official projection of 5.2-5.7% in 2017.
2. Employment stability is one of the main concern before embarking to buy properties. The unemployment rate fell to 3.4% in September of 2017 from 3.5% in the same month of the previous year.
3. On the directive of Bank Negara to manage household debts, the banks have been very prudent in their lending. This has seriously affected the market in some way and the overall transactions. Property speculation has been reduced substantially and people are more careful in their decision making. Those in the market are genuine homebuyers or investors.
In conclusion, the key question is on affordability instead of the health of the property market. Eric said, "the issue of affordability is common and prevalent to all Developed Economy status, of which we are entering into this category in line with our Vision 2020."
For the record, the property prices are comparatively among the lowest in the region thus far.
Moving forward, many developers are shifting to the affordable home segment priced between RM300,000 to RM500,000 range in support of government calls to answer to the needs of the particular segment.
"Numerous government supports have been offered to the B40 category and we appeal to the government to look into the assistance support for the M40 category as well," said Eric.
Besides being prudent, the financial institution should provide more flexibility especially providing loans to the younger borrowers. The announcement of the Step-Up financing is one of the ways to go for these target groups.
An appreciation to Maybank in its recent introduction of the Rent-To-Own scheme which aimed to elevate the issue of affordability and initial payment burden. We look forward to seeing more similar initiatives from other leading financial institution too.
"In order to boost and encourage more foreigner purchaser, we reckon that the government should adjust or remove some of the restrictions which are more apparent in certain states," said Eric, adding that a more accurate and timely property data should also be provided to assist developer and property buyers in making a good investment decision.