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Property deals drop, value of transactions rise, prices may rise

February 26th, 2014 Leave a comment

Faizan Abdul Rahman said the residential sub-sector, which accounted for about 64% of the total property transactions, saw a 14% drop from a year earlier, with average house prices exceeding RM300,000.

Property transactions dropped in the first nine months of last year, said the Valuation and Property Services Department, confirming observations by real estate professionals that the market is slowing down.

Although the number of transactions was lower, there was an upward trajectory in value, an indication of rising prices.

The department’s deputy director-general Faizan Abdul Rahman said the residential sub-sector, which accounted for about 64% of the total property transactions, saw a 14% drop from a year earlier, with average house prices exceeding RM300,000.

Faizan was speaking at the 7th Malaysian Property Summit 2014 organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants yesterday.

Faizan said the commercial sub-sector saw a drop of 22.3%, compared with the previous year.

The industrial, agricultural and development sub-sectors saw reductions of about 20%, 13.6% and 8.3%, respectively.

The total number of transactions for the first nine months fell to 280,820 valued at almost RM106bil, compared with 328,692 in 2012 worth RM107bil.

Transactions in 2010 surpassed the RM100bil mark as a result of an extremely buoyant market, which started in 2009. It has been on an upward trajectory since then.

On the effect of the various tightening measures, organising chairman Choy Yue Kwong said they would curb excessive speculation.

Choy, who is Rahim and Co (Selangor) Sdn Bhd managing director, said the measures would discourage speculators from using bank loans to finance their purchases.

“The curbs are slowly taking effect. The measures will have a significant impact on speculation, especially speculators who depend on bank loans,” he said.

Choy added that the real property gains tax (RPGT), however, will have little effect on curbing speculative activities in the market.

He said the RPGT should have been introduced earlier when house prices were lowerand prices had appreciated faster, resulting in higher profit margins.

Prices had skyrocketed now, squeezing profit margins and rendering the RPGT less effective, he added.

CH Williams Talhar & Wong Sdn Bhd managing director Foo Gee Jen, meanwhile, said there was a mismatch between the demand for real estate and supply.

“There is an oversupply of high-end residential property in the market. Prices have gone up too much over the last few years. What people really need is affordably priced lower-to-mid-range housing,” said Foo.

“Developers will be pressured to cater to this market segment that is most in need. Having said that, the bright side is that the market is expected to stabilise with more realistic prices over the year.”

Source: StarProperty.my

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  1. Cicak
    February 26th, 2014 at 17:09 | #1

    Hmmm……I wonder what caused the number of deals to drop……

  2. YesOrNo
    February 26th, 2014 at 20:32 | #2

    No money.

  3. ck_100
    ck_100
    February 26th, 2014 at 22:08 | #3

    Interesting info, perhaps most of the people has hold back and been observant?

  4. WTH
    February 26th, 2014 at 22:16 | #4

    This is a good sign toward more healthy house price and less speculator. It also a good times for the everyone to increase their salary and reduce their debt.

  5. JBond
    February 27th, 2014 at 00:09 | #5

    @WTH
    higher price is more healthy price? Other time no need to increase salary or reduce debt? what kind of logic is that… less deals means the buyers pool is diminishing..warning sign for price correction..

  6. Swan
    February 27th, 2014 at 10:05 | #6

    Hi

    In my opinion, it seems the cooling measures are slowly taken into effect, it is to minimize the specualtive market and it is getting toward healthy and correction in price, over the past few years, high rise has been tremendously double, it is getting unafffordable for local, besides, the gap between salary and property is getting widen. especially those wanted to stay in Penang island is getting harder and expensive. therefore, i would say that it is a good sign and beginning as it has to be controlled from further speculated. my 2cents

  7. The_Light_will_Drop_till_300K
    February 27th, 2014 at 17:24 | #7

    buyers pool definitely diminishing. Bankers friends I come across also said that less and less people send in proposal for buying new property since late last year. This year the price correction dilemma kicks in everyone hold on their money to watch for better opportunities. The chiat lat group is the one thinking to flip which OC obtain is end of 2013 or anytime now.

  8. WTH
    February 27th, 2014 at 21:48 | #8

    @JBond
    Averaging the degree holder with 6years working experiences can get 5k-8k a month. A couple total income easily over 8k a month. That is enough to pay a rm600k house for 30years loan. The holding power still strong even not much saving left. The price correction mainly will affect the luxury house, over rm800k. This is not likely to hit the majority house owners since most are owner own houses below 600k. However, it will hit the developer sales and bank to maintain the consistency of loan approval to maintenance bank profits. Every year employees will get salary increment 3-8%. When the houses price growing slow or pause, your 3-8% could easily catch up the houses price rise. The times will slowly build up the house price fundamental. Bank Negara did put a lot of efforts to cool down the market, that is healthy. Gov also try to get more foreign investment to create new jobs, that is healthy. Tourists are also the main contributor to create more jobs and also increase gov yearly income, that is healthy. Eg. 5mils foreign visitors visited penang a year. Each average spending rm1k. RM6bils was created and actually beneficial to penangkia who doing businesses related to tourism. So many advantages and strategy place to make or increase incomes at penang, do you think the property will have a huge price correction? I not really think so.

  9. WTH
    February 27th, 2014 at 22:25 | #9

    One more healthy point at penang
    Malaysia medical tourism reached RM548 million from a total of 600,000 patience 2012
    Penang received the highest share of foreign medical revenue at 49 per cent or equal to ~270mils a year.

  10. Kuda
    February 27th, 2014 at 22:35 | #10

    @WTH

    Agree with you that professional income should be able to sustain a 30-year RM600k loan. But my friend got 3 loans, RM400k, RM700k + RM750k. He bought the last 2 properties on DIBS, so he is OK now. But he is very worried when he needs to start paying for the loans in 2 & 6 months time. His wife got retrenched 2 months ago (unexpectedly), and it is quite difficult to get a “professional” job now.

    But luckily he bought his RM400k home 6 years back, so it has actually appreciated quite a bit. He has put this home on the market 2 months ago, but no buyer yet, everyone is wait-and-see. He is considering a part-time job.

  11. James
    February 27th, 2014 at 22:46 | #11

    @Kuda
    His wife should also get part time job while waiting for an actual one

  12. Hemsley
    February 28th, 2014 at 17:15 | #12

    @Kuda

    Right. Most of the professionals not only get a comfortable 600K loan but stretch to limit to buy additional property for flip/ rent and so on. This is what making the bubbles as the property sales is not base on actual demands/ needs.

  13. Malory
    March 2nd, 2014 at 12:30 | #13

    with all finished property selling at 400-600k at least, and professional jobs dropping (retrenchment in Penang), who is going to buy? The best bet is to have people working in SG and buy but the rental market here is dropping as well (jobs dropping). Again, who is going to buy when you flip? Then what would happen? Declare bankrupt and auction?

  14. Anti-speculator
    March 2nd, 2014 at 16:14 | #14

    Balik Pulau is good case of fake demand of housing. Many nice houses have been built, demand is fake, i.e. not for people who really want to stay there, but to buy, hold, and sell later. DOnt believe me? Go there at night, drive around housing areas and you will see, 9 of 10 houses are unoccupied. So, fake demand is created, pushing price ever higher and higher.
    So, you speculator, it suits you know for making the lives of millions miserable.

  15. papa
    March 2nd, 2014 at 18:34 | #15

    Not need to go balik pulau….look at white lily , many KL speculators has been stuck there for many months liao…

  16. yu
    March 2nd, 2014 at 22:45 | #16

    We don’t see the price drop unfortunately.

  17. YH
    March 3rd, 2014 at 00:34 | #17

    2015 bubble burst,start from iskandar and spread the panic to other cities,lets see

  18. Real Market
    March 3rd, 2014 at 00:56 | #18

    @YH

    By 2015 the property market will be going up again.

  19. Concern buyer
    May 7th, 2014 at 18:51 | #19

    @Real Market
    Not true. 2014 is when 60% loan is rejected. You see most new project only have 40% buyer able to get loan. So in 2015, we will see first time that developer going bankrupt. Buyer will suffer. Economy go down. Property market will crash. House price will drop between 20% to 40% depending on location. Example is double storey terrace in BM will reduced to RM300k. While Bayan Lepas terrace will go down to RM500k.

  20. Concern buyer
    May 7th, 2014 at 18:56 | #20

    http://www.propertyguru.com.my/property-news/2013/12/11522/more-properties-to-be-auctioned-next-year

    “He noted that in case the property market slows down and buyers who acquired properties with DIBS are not able to pay their loans, ending up with their property being foreclosed; these buyers will not be able to repay their debts even after their properties have been auctioned while banks will not be able to recover the loan’s full amount.”

    This situation will be worsen in 2015.

  21. Waiting
    May 7th, 2014 at 19:49 | #21

    @Concern buyer

    No need to go down to RM 500k for Bayan Lepas terrace, I will buy even
    when the price is RM 600k. It won’t go down. Only those are dreaming will
    say so.

  22. Chocolate
    May 7th, 2014 at 20:42 | #22

    Concern buyer :
    @Real Market
    Not true. 2014 is when 60% loan is rejected. You see most new project only have 40% buyer able to get loan. So in 2015, we will see first time that developer going bankrupt. Buyer will suffer. Economy go down. Property market will crash. House price will drop between 20% to 40% depending on location. Example is double storey terrace in BM will reduced to RM300k. While Bayan Lepas terrace will go down to RM500k.

    Your sentence will make u look like a stupid next year.

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