Property prices buoyed by a number of factors
Industry players foresee a future increase in property prices as incoming supply falls, making it a good time to buy property.
“I reckon supply [of residential] will drop this year, even next year. But I think property prices will start to increase because we will see [a] lack of supply in the future as developers are holding back launches,” said Zerin Properties group chief executive officer and founder Previndran Singhe.
Previndran was sharing his views in a panel discussion themed “Property Watch — Buy, Sell or Hold?” at the CPA Congress 2015 yesterday.
Other panellists were immediate past president of Real Estate and Housing Developers’ Association Datuk Seri Michael Yam and Bina Puri Holdings Bhd group executive director Matthew Tee Kai Woon.
The Edge Communications Sdn Bhd and The Edge Property Sdn Bhd managing director Au Foong Yee was the moderator of the session.
According to Yam, location is no longer the only consideration when it comes to buying a property, but timing as well, due to the changing property landscape.
However, he is still confident of the outlook on the property market because demand for housing is still strong despite the discouraging market performance in the first half of this year.
“The slowdown is due to several reasons such as the implementation of the goods and services tax (GST), poor market sentiment caused by a weakening ringgit and low commodity prices, as well as higher construction costs. Most developers are adopting a wait-and-see strategy,” said Yam.
Tee concurred that property prices will not be going down anytime soon because construction cost continues to go up.
“If you are hoping the property prices are coming down soon, that might just be a dream. Besides the GST, manpower cost is moving up now. The cost of hiring skilled Indonesian workers has increased by 30%. Not to forget the material cost has also increased due to volatility of the currency,” he said, adding that in the past, property prices in prime locations almost never went down even during economic slowdowns.
Previndran was of the view that there are loads of property investment opportunities in the nation, naming hotspots such as the Klang Valley, Greater Kuala Lumpur, Penang, Johor and Kota Kinabalu.
Yam also urged buyers to look for hidden gems in the secondary market as more than half of residential transactions were from this market.
CPA Congress is an annual flagship event by CPA Australia. This year’s conference theme is “Leadership, Strategy, Business”. CPA Australia is one of the world’s largest professional accounting bodies, representing more than 150,000 members in 120 countries.
Source: TheEdgeMarkets.com
“If you are hoping the property prices are coming down soon, that might just be a dream. Besides the GST, manpower cost is moving up now. The cost of hiring skilled Indonesian workers has increased by 30%. Not to forget the material cost has also increased due to volatility of the currency,” he said, adding that in the past, property prices in prime locations almost never went down even during economic slowdowns. – AGREE
Only time can tell !
Cost is only 1 of the many factors that affected the Property Price but Financial & Economic conditions is the most important one.
Don’t you see the Commodity & stock market has tumble ?
@Go4mainland
“If you are hoping the property prices are coming down soon, that might just be a dream. Besides the GST, manpower cost is moving up now. The cost of hiring skilled Indonesian workers has increased by 30%. Not to forget the material cost has also increased due to volatility of the currency,” he said, adding that in the past, property prices in PRIME LOCATIONS almost never went down even during economic slowdowns.
So is he saying property price in non prime locations will come down in spite of higher manpower cost? since he only dare to say that “in the past, property prices in PRIME LOCATIONS almost never went down even during economic slowdowns.”….:)
General agree with this article, rundown in primary market supply will drive property prices up despite the current equity market decline, politics uncertainly and decline in commodity prices
Demand of properties will uphold because increasing population and needed a shelter as a basic need. As an example for Chinese ethic men, who own a house is a pre-requirement for them to set up a family.
However, I am not agree with the fact of rising construction material cost and 30 percent increase in wage for skill Indonesian worker. Indonesian workers are paid in ringgit not US dollar. Construction material for landed property for instant can be get locally so this is free from weak ringgit sentiment.
For me, property price is depend on demand and supply theoretical. If economy Malaysia has tumble, factories shutdown, inflation rate burst, companies cutting staff cost, unemployment rate rising & etc, every family also need to keep cash for daily expenses. Even the construction material cost and labour cost have driven the property price up, but if there are no demand (price no longer afford by citizen), developer want to sell their houses to whom?
I agree with DreamHome. A lot of construction material can be obtained locally.Furthermore, prices for material like copper (used in electrical wiring), iron ore (used in making steel products), coal etc have come down a lot (more than 50%) in international markets compared to just a couple of years back. Developers always have stoopid excuses to increase their profits.
Property price may be stubornly still high and increasing but who is buying ? who is giving loan ? So, end of the day, got market value but no market.
Then, those whom cannot tahan liow will let go much lower price lo but will still report as selling high price lo due to pride and ego.
Yes, Financial & Economic conditions, market sentiment will determine the property demand and price and not just developer’s lament on higher cost.
Let see who win this time…..next year will be known
Nowadays property not buy for stay but make money, u can see many project after oc, bundle of list at mudah, and the price keep decrease day by day, y like that? but still alot buyer bought new project even more exepensive than subsale, y like that?
Hi ==,
That’s because some buyers of new projects get big discounts from developers for committing to buy at specific minimum number of units, before the units are open for booking to the rest of the buyers. The discounts can be as high as 30%. We will call this Group A buyers. Group A buyers also include associates, friends, relatives of the developers.
So when the rest of the units are open for other “outsiders” to buy (we will call this Group B) almost 50% were sold to Group A. The 50% sold creates a psychology of “urgency to buy” for Group B. And Group B will be “hinted” by the developer that price will be increased further when Group C comes. So Group B will rush to buy. By the end of Group B, almost 80% sold, waiting for the super sucker Group C….:))
Like that lor!
@david
Haha, I think the main issue here is not about who’s winning. You have to look at things from a broader perspective. State gov will have to do the right things to discourage speculation. To be exact, more nice affordable homes have to be built. New policies have to be made to make that happen. Spore gov was very determined to reverse home prices over the last 2 years with various anti speculation policies. And in the end, property prices came down 20-30%, and the PAP gov was rewarded with resounding success in the recent election. In short, it doesnt pay for the gov to side with the rich (eg. developers), but it pays big when you are with the average people.
http://news.sinchew.com.my/node/444822?tid=1
Cozy home and lovely house at really high price. Those giving a wide smile are the developers and investors. Squeezing the first time house buyer 30 years of juice.
Condo at KLCC also can drop la, who said property in prime location would never drop one? lying with eyes open.
got money mah say price go up lo
no money sure curse price drop because no money buy
@daddy
no lo, people got money say price will be up because they want to let go their unit now.
Well, saying is one thing, you can say price go up, or price go down, but everything boils down to SUPPLY, DEMAND and FACTS. The FACT is, transaction prices have soften, volume has come down, and there are more and more and even more empty homes coming up.
For those with a lot of money to burn, maybe they are happy paying mortgage interests, thinking that they will make money at the end of the day (but no one knows when that end of the day will be).
For those who are on a budget and just starting out, the affordable homes would be a great choice.
Please be more specific to make this discussion more meaningful.
Too generalized and too broad is quite meaningless.
Please divide into Condo/Apartment and landed.
Will there be oversupply in Freehold landed on East of Island side?