Property Market To Remain Flat In 2018

Last update: 22/11/2017KUALA LUMPUR, Nov 22 (Bernama) -- The property market is expected to remain flat next year due to lack of stimulus to offset the situation, property portal Property Guru Malaysia said.

"The market has seen similar trend for the past eight quarters (in 2016 and 2017) and there would be less indicators to show the potential of Malaysian property market improving next year," its Country Manager, Sheldon Fernandez said.

He said affordable housing was the key factor that could boost the property market, but looking at house prices, they were still unaffordable for most people with a monthly income less than RM5,000.

As the property price in Malaysia is 4.4 times higher than Malaysian annual median income coupled with high Consumer Price Index at 4.3 per cent, he said it affected consumers buying power and made most houses severely unaffordable.

There will be more projects using the Industrialised Building System (IBS) technology being implemented and launched in the affordable segment next year, he said at the Property Guru Property Outlook Forum 2018, here today.

Fernandez said the implementation of the IBS technology could help developers reduce their development costs, and in the future, the IBS could help create more affordable houses due to increased productivity and efficiency in the development process.

The IBS involves the use of prefabricated components and mechanisation to reduce manpower requirements and material wastage, reducing construction timeframe compared to conventional methods.

Meanwhile, Jones Lang Wootton Executive Director Prem Kumar said the downward trend of the property market was caused by oversupply of properties.

"We are certain on the oversupply issue, but one thing for sure, the affordability issue faced by most consumers was due to their reduced buying power," he said.

Furthermore, he said there would be possible market distortion from the current freeze on luxury property development announced by the government recently.

"The freeze in luxury property development might caused land valuation to be much trickier," he said.

The government has frozen approvals for luxury property developments costing more than RM1 million per unit from November 2017 to control the oversupply from adversely affecting the economy.

In the mean time, Kumar said the government needed to build a database for the property market to ensure more transparency, and most importantly, to assist it in making effective decisions related to the property sector in the future.

"The database is also important for us to make demand profiling through effective demand forecast," he said.