‘ Realistic National Housing Policy Needed ‘


The government should formulate a realistic national housing policy to ensure supply meets the real demand of the market, says expert.
The policies also need to be discussed with stakeholders before implementation so that all parties will benefit when implemented, says Sr Samuel Tan, Executive Director of KGV International Property Consultants. Tan was responding to questions from Asian Property Review on the continuing market slump in Malaysia. “In short, any measures taken by the government must be pro-active and preventive rather than reactive in that they should be taken before any problems arise.”
“For example, the government should be able to anticipate the stock available in the market by a particular period. If there is a possibility of oversupply, development approval rate should be slowed down and vice versa.” The government should also work with other stakeholders to lower the development costs, he added.
Tan noted that the current slowdown arose from the convergence of various factors – sentiment has been low since 2H 2014 due to reduced disposable household income caused by higher cost of living, market fear of oversupply, difficulty in obtaining end-financing, and a mismatch of supply and demand.
[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”1,2,3,4,5,9″ ihc_mb_template=”1″ ]

“This slowdown came after some 5 years of growth, meaning it is a natural trend for the market to take a breather.” He added that depending on specific regions, it would probably take a year or two for the market to digest the current supply, based on the property cycle of the past and also based on the current market scenario.
Tan did not think that Bank Negara Malaysia (BNM) will lift or partially modify the current cooling measures. “If there are any changes, it might be micro-tuning the existing policies to favour first-time homebuyers.”
“This is because Malaysia’s household debt level is still high and BNM is attempting to manage this to a healthier level and any loosening of its policies will run contrary to its objectives.”
Tan also explained that prices are persistently high in certain segments of the market due to the cost factor and Malaysia’s housing policies.
“Over the last few years, land cost has become exorbitantly high in certain localities. Construction and other compliance costs also increased resulting in higher selling prices, notwithstanding the market condition.
Also, when the government raised the minimum price threshold for foreign ownership to RM1 mil each, “it inevitably caused developers to raise the prices of their products to such level in order for foreigners to qualify to purchase. “This in turn resulted in an overall price increase. Seeing the high selling prices, landowners also increased the prices of their land. It is a vicious cycle.”
On the impact of the Ringgit depreciation against the US dollar, Tan is of the view that if the current depreciation is anticipated to worsen, foreign investors will not enter the market. Conversely, if the currency is stable or expected to appreciate, foreigners will see the future forex gain as another pull factor.
 
[/ihc-hide-content]

0
    0
    Your Cart
    Your cart is emptyReturn to Shop