Homebuyers wait and see

KUALA LUMPUR (Nov 25): Homebuyers are adopting a "wait-and-see" attitude until a clearer picture emerges on the implementation of the Economic Transformation Programme (ETP) and housing-related government initiatives, according to a mortgage broker.

Adrian Un, a director of Mortgage Broker Sdn Bhd, said in an interview that although people are generally optimistic about the ETP and Budget 2012 announcements and initiatives related to homebuyers, the "haziness and lack of clarity as to how these will be implemented is a major deterrent to many would-be purchasers".

"It's not just about announcements. Consumers are waiting keenly to see how these policies will be carried out. They are also looking for concrete signs of action.

"Looking ahead, the secondary market will slow down as soon as the new property-related policies under Budget 2012 kick into action," he said.

Under the budget, real property gains tax (RPGT) for properties held and disposed of within two years of the date of purchase rises to 10% (up from the current RPGT of 5% for properties sold within five years of the date of purchase). This will no doubt affect the market and be a showstopper for speculators, he said.

Un also expects banks to be more cautious and stricter in lending due to the volatile global market conditions.

Bank Negara Malaysia's implementation of a maximum loan-to-value (LTV) ratio of 70% on the third property has also affected investments in the housing market.

Un offered a few property investment hotspots in 2012 to consider.

"The hotspots in 2012 will be in the south of Klang Valley such as Kajang, Semenyih and Cyberjaya. There will be be an increased demand for areas such as Rawang and Bukit Beruntung. Existing and upcoming projects along the proposed mass rapid transit and the extension of the light rail transit line will also enjoy a better demand," he said.

In Kuala Lumpur, he believes that demand and prices in the KLCC area will eventually rise given its strategic location, the projected increase in tourism and foreign investors and with the implementation of ETP projects including the Greater KL plan.

"Properties in the Kuala Lumpur central business district are still affordable compared with other cities in the region," said Un.

A property sentiment survey by property portal HomeGuru Sdn Bhd conducted among 2,824 respondents across Malaysia in 3Q11 revealed that consumers are more optimistic about being able to afford property.

Compared with the preceding quarter, 55% of those polled believed that house prices will increase in the next six months, down from 86% in 2Q. The Consumer Property Sentiment Index was up 2.9 on a scale of five in 3Q11, compared with 2.1 in 2Q and 2.4 in 1Q.

Steven Tan, country manager of HomeGuru, said the percentage of respondents who felt all residential properties were expensive was down by 10% from 2Q to 63% of the total respondents. About 27% said bungalows, apartments, condominiums, terraced houses and SOHO (small office home office) were more affordable, compared with 17% in 2Q.

He added that confidence in property as an investment will continue to be high among Malaysians. "It's the safest bet [compared with investing in shares]."

Tan added that despite the increased optimism over housing affordability, more than 60% of those polled want the government to do more.

"Most respondents want to see the government take on more cooling off measures," he said.

According to the poll, over half of the respondents had negative sentiments about the government's My First Home Scheme (MFH). This is largely due to the lack of proper guidelines and the rising property prices in the Klang Valley.

The MFH allows 100% financing for first-time homebuyers aged 18 to 35 years old with a monthly salary of not more than RM3,000 to buy houses priced at RM400,000 and below.

While the 1Malaysia Housing Programme (PR1MA) has garnered more positive response, most respondents were not in favour of two restrictions under the scheme, including the control on the rental of the property and the one-house-per-individual purchaser rule. PR1MA is a government programme to develop more affordable and quality houses specifically for the middle-income group in identified areas in and around the Klang Valley.

"Based on historical data, we foresee that the primary market will continue to grow because purchasing power is still there. Landed homes, shops and high-rise residences will still be in demand in the coming year," Tan said.

The survey also found more Malaysians looking at investing overseas. Of those polled, 24% were interested in overseas investment, up from 18% in 2Q. The top five countries respondents were interested in were Singapore, Australia, the UK, India and Indonesia.

Looking for properties to buy or rent? With >150,000 exclusive listings, including undervalued properties, from vetted Pro Agents, you can now easily find the right property on Malaysia's leading property portal EdgeProp! You can also get free past transacted data and use our proprietary Edge Reference Price tool, to make an informed purchase.