Rehda Debunks 2019 Price Turnaround
Contrary to property consultancies and real estate agents' reports that house prices will pick up in the second half of 2019, Rehda Institute chairman Datuk Jeffrey Ng Tiong Lip says this is unlikely.
“The broad national economy will always have an impact on house prices. Look at the gross domestic product (GDP) for 2019, which is expected at 5% plus minus or it could actually go down. So, how can property prices for 2019 be better than the current year?” Ng asked.
Given the slower economic outlook, house prices will not do better than what we are currently achieving for 2018. However, there are various caveats to this, said Ng at the Annual Property Developers Conference Rehda Institute CEO Series 2018.
It depends on the coming Nov 2 Budget 2019. Ng said if the government succeeds in working with Bank Negara to come up with an easier financing scheme which is targeted across the board and not just at first-time house buyers or the bottom 40 group, this may create that feel-good sentiment.
“If the government were to introduce a broad-based approach, this may see the market move up in tandem, instead of measures targeted at a particular group,” Ng said.
Rehda Malaysia president Datuk Soam Heng Choon said some real estate agents have been rather bullish, but there are local and external factors that would affect the broad national economy and ultimately the property sector.
“The United States-China trade war will affect our GDP, there will be ripple effects,” Soam said.
The government is already instituting various actions to spur the property market, both at state and federal levels. The sales and service tax (SST) being just one of them at the national level.
“Definitely, there will be savings. We will see how much. More importantly, the focus today is affordable housing and there will be ample of these,” Soam said.
He said at the state level, the Selangor state exco government is already working on financing for affordable housing scheme Rumah SelangorKu and the outcome is being anticipated eagerly.
Property consultancy JLL head of research Veena Loh is cautious about the 2019 outlook. She said the property market has so far seen uncertainty in terms of pricing.
“The introduction of the SST does not seem to have affected prices in an already soft market. The 2019 outlook seems uncertain,” she said.
Instead of just focusing on the affordable range, she reckoned developers should take a more broad-based approach.
“Developers will try to go for a mix. This would then diversify the market and cater to the different groups of buyers.
“The new and younger generation also has difficulties getting loans. So, there will be a big market in rental as well.”
AmBank Research has revised downward the country's GDP projection to 4.8% to 5.0% this year from 5.3% to 5.6% previously.
Group chief economist and head of research Anthony Dass said the GDP revision was in line with Bank Negara's GDP revision of 5.0% for 2018.