More needs to be done in addressing gap in property market - PropertyGuru

Last update: 17/05/2019

KUALA LUMPUR, May 17 (Bernama) -- While Malaysians are satisfied with the government’s efforts in providing affordable housing to the people, the majority still feel that a more targeted approach could be taken to address the pressing gap in the property market.

According to the PropertyGuru Consumer Sentiment Survey Second Half (H2) 2018, there is a widespread perception that property prices remain high in the country, with unfavourable market timing and lack of capital and good financial options being cited as challenges by property seekers.

In a statement today, PropertyGuru Malaysia country manager Sheldon Fernandez said participants in the survey expressed an increased level of satisfaction on the government’s housing initiatives at 22 per cent,  compared with only seven per cent in the first quarter of 2013. 

“This reflects increasing confidence in public sector initiatives over the past few years, with Malaysians wanting the government to up the ante in its initiatives to provide more affordable national housing for the masses,” said Fernandez.

However, despite the demand for affordable housing programmes, the actual uptake remained low, with 41 per cent of the survey’s respondents saying that they were not qualified to apply for national housing initiatives.

For example, only 19 per cent of survey participants had applied for the 1Malaysia People's Housing (PR1MA) scheme.

Fernandez said a large segment of house seekers were either not qualified or unaware about existing affordable housing initiatives, which had deterred them from applying for or even considering these options.

“Another challenge is the lack of consensus on what exactly constitutes affordable housing itself, as baseline prices vary from location to location.

“That being said, the majority of respondents considered properties in the RM300,000 to RM500,000 range to be in the affordable spectrum,” he said. 

This was supported by recent Bank Negara Malaysia reports, which found that 61 per cent of loans approved in 2018 were undertaken for properties below RM500,000.

Meanwhile, 76 per cent of the survey participants anticipate continued price increases in the next six months, indicating a prevailing negative price sentiment in the market.

The survey said household income in Malaysia had failed to rise to commensurate with costs, with many respondents citing unfavourable timing and market conditions as a factor in their property decisions.

“Our survey found that over half (51 per cent) of respondents had resorted to withdrawing their Employees Provident Fund savings at least once to purchase properties,” he said.

In total, banks distributed RM133 billion in home financing to some 350,000 borrowers in 2018.

The survey also found that the younger generation were the ones who had been the hardest hit by property financing issues, given the income stagnation in the country.

More than 70 per cent of house seekers under 29 years old, for example, see the prevailing interest rates in Malaysia as excessively high.

Other challenges include unfamiliarity with the paperwork involved, unfavourable credit histories, unstable source of income and outstanding debts that contribute towards high debt-service ratios in the country, such as car loans, personal loans and outstanding credit card debts. 

The PropertyGuru Consumer Sentiment Survey H2 2018 was based on a sample group of 944 participants, conducted via online questionnaires.

The majority of respondents comprised 30 to 39 year olds from the professionals, managers, executives and businessmen work demographic and medium to high-income households in the Klang Valley.