THE MALAYSIAN property market got off to a slow start this year with fewer new launches and transactions. The slowdown was in large part attributed to tighter financing rules as well as the cooling measures announced in Budget 2014. These include a hike in the Real Property Gains Tax and an increase in the minimum purchase price for foreign buyers.
However, property prices are holding up well, says Previndran Singhe, CEO of Zerin Properties. In established areas like Damansara Heights and Bangsar, a marginal increase has been noted, he adds.
“What the cooling measures have done is decrease the volume of transactions but not the transacted prices. I think if you want prices to drop, you need to work on increasing the supply.
|Previndran: What the cooling measures have done is decrease the volume of transactions but not the transacted prices|
“The drop in the volume of transactions is due to the tightening of financing. We see this easing as the banks get aggressive again,” he says.
Asking prices have, however, dropped to a more realistic level.
“That’s what we are seeing in the market now and I expect we will see more activity in the Penang and Greater KL property markets in the next quarter. Greater KL is still the place to invest in with the mass rapid transit and various other projects under the Economic Transformation Programme coming in,” Previndran says.
The Johor property market, on the other hand, is reeling from the introduction of additional measures by the state, such as a 2% tax on purchase by foreigners, he notes.
“The fundamentals for Johor Baru are strong but the market is slow, especially for condominiums, which is the property of choice for foreigners. However, the landed homes segment is doing very well,” he says. He expects the Johor market to pick up in the next quarter as confidence returns.
Even though the Penang government also introduced additional cooling measures, Previndran says these are good steps designed to contain speculation and would not have an impact on the property market.
Previndran will be speaking at The Edge Investment Forum on Real Estate 2014 to be held on
April 19 at The Royale Chulan Damansara in Mutiara Damansara.
His presentation, Are property prices falling? What to expect in 2014, will look at the current and future property markets in Greater KL, Penang and Johor, the impact of the cooling measures and tighter financing, and what is to come this year.
This article first appeared in The Edge Malaysia Weekly, on March 31, 2014.
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