KUCHING: Sarawak's property market has slowed down in the first few
months of 2014, says CH William Talhar Wong and Yeo Sdn Bhd (WTWY), as
local developers experience knee-jerk reaction in sales while many have
delayed their launches and reduced sales targets.
In its report
entitled '˜Property Market Review for the first half of 2014', the good
run between 2009 to 2013 seems to be consolidating in early 2014, WTWY
said, possibly unveiling 'the tip of the iceberg' of the impact of
tightening measures put forward in the recent Budget 2014.
These
moves include the increase in real property gain tax, the abolition of
Developers Interest Bearing Schemes as well as strict lending policy
implemented by banks and financial institutions, which is aimed at
curbing speculation and the impending implementation of the Goods and
Services Tax (GST).
'The last few years have seen property prices
increase anywhere between 30 and 100 per cent. Purchasing power was
further weakened with the recent increase in Base Lending Rate (BLR) to
3.25 per cent,' WTWY said in the report.
'Increase in property
prices in the primary market due to increase in materials and
construction costs have helped to propel the secondary market which is
comparatively cheaper.
Thus, it is expected that the secondary market would be in good demand.'
The
property market for 2014's first half is showing tell-tale signs of a
correction, WTWY opined, with decreased number of units launched and
developed compared to the same period a year ago as well as slower sales
due to most property products having been already absorbed in the past
two years or so.
Performance for the property market for Sarawak
can be said to be moderate and consolidating with transactions recorded
by NAPiC declining by 22 per cent in volume and 13.3 per cent in value.
'This
is true for almost all sub-sectors, notably agriculture by 23 per cent
and commercial by 28.8 per cent, although values increase by 5.8 per
cent and 12.6 per cent for development lands and industrial units
respectively,' explained WTWY.
'Of particular interest would be
the residential sector which decreased by 22.8 per cent and 20.7 per
cent respectively in terms of both total transaction value and volume.
Agriculture
lands make up the highest proportion of transactions at 2.4 per cent
followed by residential (40.3 per cent) and commercial (seven per cent).
'However,
it is prudent to note that generally, property prices have not dropped.
On the contrary, property prices continue to rise despite the slower
sales performance. Selling prices are expected to further increase with
the implementation of the GST in 2015.'
Moving ahead, mega
infrastructure projects seem to be the wildcard to boost the sector as
better connectivity will ease travelling time and open up and boost
sales of new areas, WTWY said.
'The building, upgrading and
improvements of roads and infrastructures have served to open up new
areas in the state such as experienced by Kuching via the new Matang
Jaya-Demak link road, Batu Kawa-Matang road and Stutong-Airport Link
Road.
'The houses in these new areas are priced quite
competitively and have seen prices comparable to those in more
established areas.
As the population spreads out, new areas are
opening up, serving a wider population, whilst at the same time,
spurring further the prices of houses in the built up areas.'
WTWY
also underscored strata titled residential developments -such as
condominiums, apartments and some townhouse offerings '“ were catching on
in the major towns especially Kuching, Miri and Bintulu and increasing
at an encouraging rate.
'This has resultantly pushed up prices of
such units from less than RM300 per square feet (psf) a year or to as
high as RM600 psf in the prime areas,' it observed.
'Forced by the increase in land costs, and smaller-sized development lands, developers find it more lucrative to build high.
'This
development type offers a more affordable alternative compared to new
landed houses and is also spurred on by the receptiveness of the new
generation of buyers who prefer and appreciate convenience and
security.'
Moving ahead, WTWY said the lacklustre performance of
the real estate sector is expected to persist as the market looks
apprehensive and more remains to be seen with the introduction and
implementation of the GST by April 2015 and the possibility of further
increase in the BLR.
'However, some are of the opinion that the
impending GST will spur earlier sales later part of this year in a move
to avoid the tax.'
