Is It All Doom & Gloom?

Not so, if based on NAPIC report, with RM46.94 bil worth of 115,476 units alone transacted in the first half of 2020.

Sr Michael Geh is the Immediate Past President of FIABCI Malaysian Chapter

The Valuation & Property Services Department (JPPH) of the Ministry of Finance Malaysia released a statement on the property market activity that showed a sharp decline in the first half of this year (1H20).
The JPPH statement is based on the factual transactional activity index which are records of the total number of Sale and Purchase Agreements (SPAs) that have been signed.
Senior Partner of Raine & Horne International Zaki +  Partners Sdn Bhd Sr Michael Geh who is also the Immediate Past President of the International Federation of Real Estate (FIABCI) Malaysian Chapter points out that despite the sharp decline, the Malaysian property market still recorded RM46.94 billion worth of transactions in 1H20.
“This shows that the market is still active, as there were a total of 115,476 transactions recorded for the first half of this year despite the Movement Control Order (MCO),” he says.
The market had only recorded a drop of 27.9% in volume and 31.5% in value as compared to the first half of 2019 which recorded 160,165 transactions worth RM68.53 billion.
Geh says this is evidence that the market remained resilient despite the challenging economic conditions and impact of the Covid-19 pandemic. The transactions recorded are also partly due to the spillover effect from the Home Ownership Campaign (HOC) 2019.
“We have seen activities increase in Q3 of 2020 and I am sure transactional activities will show an upward trend from June onwards,” says Geh.
He opines that the property market today is segmented so the decline must not be generalised for the overall market.
“The property values in high-end, premium and mature neighbourhoods will continue to hold.” Arguing that properties built in undesirable locations is expected to be left unsold, the reasons are possibly due to mismatch and insufficient information or perhaps with the players being overly optimistic about the market.
Speculatively held projects, especially condominiums he opines, saw the most decline in value. while Government initiatives of pushing for new affordable housing stock and PR1MA projects that are priced at & below RM300,000 have dragged down the overall property market house index.

“The abundance of new affordable housing launches and PR1MA housing stock have dragged down the overall housing price index in 2020 and is expected to continue into 2021,” he analyses further.
Inevitably, this means that housing prices have become more affordable for Malaysians especially the B40 group due to these Government initiatives.
He adds that the reintroduction of the HOC coupled with incentives stimulated the primary market while the Real Property Gains Tax (RPGT) exemption and the relaxation of the financing margin limit for third housing loans will spur the secondary market and keep the property market buoyant in 2020.
“We await other initiatives for the rakyat from the coming budget for 2021,” he concludes.

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