KUALA LUMPUR: There is growing evidence of
softening demand for residential property priced at RM1mil and above, as buyers
turn cautious amid a rising glut in the higher end of the market.
But an expanding working population in growing
cities around the country will keep demand in the affordable housing segment
steady in 2015, according to speakers at the Property Market Outlook for 2015
seminar.
"The property market is expected to moderate
in 2015," said Valuation and Property Services Department deputy
director-general Faizan Abdul Rahman.
"Nevertheless, the residential property market
will continue to sustain, underpinned by the growing working population and
first-time home buyers."
According to Faizan, highlights of the housing
market would be below RM500,000, while high-end housing priced above RM1mil is
likely to wane.
More than RM124bil worth of property was
transacted during the first nine months of 2014, up 15.8% compared with the
same period in the previous year. Volume, however, expanded at a more moderate
pace.
Rating agency Moody's Investors Service
yesterday said it expected demand for residential property in Malaysia to slow
further in 2015, crimped by the property cooling measures imposed in 2013 and
weak buyer sentiment.
It said developers focused on residential
projects in Johor, Kuala Lumpur, Selangor and Penang would face the greatest
challenge in achieving their sales targets.
"Currently, there is an oversupply of high-end
condominiums and offices," event organising chairman and VPC Alliance chartered
surveyor and director James Wong said.
This was evident, he said, as property
developers had been launching fewer projects in recent months. Wong also said
there had been a rise in property auctions, while banks were getting stricter
in approving housing loans.
"We have been seeing correctional signs since
the fourth quarter of 2014. Coupled with the oversupply, we suspect this will
not be a good year for the property market," he said.
The situation as it is, according to one
property consultant, is that high-end properties are aplenty, but
low-to-middle-income earners are unable to buy a home due to a shortage of
supply in affordable housing.
"This is where market correction has to come
in. Developers' products must be more affordable than what they had last
launched," PPC International managing director Datuk Siders Sittampalam said.
"Developers have a statutory requirement to
build 30% low-cost housing," Wong said.
"The way forward is to build affordable homes
where both public and private sectors play a part.
"However, since the cost of land in KL City is
relatively more expensive compared with the rest of the country, developers
would not be able to produce the level of profits that they are used to if they
build too many so-called affordable homes.
"Therefore, there should be more incentives
provided by the public sector," Sittampalam said.
To boost the supply of affordable housing, the Government has
come out with several initiatives such as the 80,000 units under PR1MA for
household incomes up to RM10,000, the 26,000 units under the National Housing
Department (Program Perumahan Rakyat), 37,000 units under Syarikat Perumahan
Negara Bhd and 5,380 units under the Program Perumahan Penjawat Awam 1Malaysia
(PPA1M).
