KUALA LUMPUR, Dec 14 — Malaysia’s property sector is expected to go through a “flat” year next year while market prices will benefit those looking to buy or rent houses, industry experts predicted today.
Siva Shanker, CEO of property agency PPC International, said there was no need to “panic” or worry as the property market would typically go through a cycle of a few “bad” years before recovering.
“If I were to draw a pattern, I believe 2016 will be a flat line again, it will neither go worse than it was and chances of it improving is also not there.
“And I think we will start to see a little bit of activity coming back into the market in 2017 and 2018 very slowly, hesitantly, because of the elections.
“And then when the elections are done and dusted and that’s out of the way, barring unfortunate set of circumstances, I believe in 2019 we will see the market surging forward again and the psychological year of 2020 will probably be the next high,” he said at PropertyGuru’s Property Outlook Forum 2016.
Fellow panellist and developer Datuk Seri Vincent Tiew agreed with Siva’s predictions of 2016 as a “flat” year, but went on further to say that next year would also be a good time to buy property as property value is expected to rise by 2019 and 2020.
“Yes, I think 2019 and 2020, the prices should come back up to a very attractive pricing,” the managing director of developer Andaman Property Management said.
In the same forum, Siva said Malaysians who are looking to rent houses can expect cheaper prices next year, due to financially-squeezed property investors competing for extra income to repay their housing loans.
“I think next year, we are going to see rental shooting straight down as they compete with each other to rent their properties out so at least they can get a little bit of income which they can use to subsidise their mortgages,” he said, predicting that these property speculators will fight “tooth and nail” to keep their properties and avoid defaulting on their loans.
In PropertyGuru’s Property Outlook Report 2016 that was released today, it said it expects next year to be a buyers’ and renters’ market due to the current oversupply in property.
PropertyGuru said the annual average of unsold homes in Malaysia is at 36 per cent, adding that there is less demand with weak investor sentiment as only 54 per cent of the country’s annual total buyers buy to occupy.
The new supply of completed developments will only worsen the existing oversupply, especially in the mid-range and high-end projects, it said.
“The situation may place further pressure on developers and speculators so it is quite reasonable to expect many good deals to come into the market in 2016,” the country’s leading property site said.
“However this does not mean that prospective homeowners can start demanding prices or developers will throw prices. It just means that deals would be sweeter, especially for first-time buyers,” it added.