KUALA LUMPUR ― The property market has bottomed out lower than it did last year but according to experts, this may not be a bad thing as there are still willing buyers for discounted properties.
International Real Estate Federation (Fiabci) vice-president Michael Geh said only owners who could no longer bear the hefty mortgage repayment were willing to let go of their high-end properties at 20 to 30 per cent less.
“If you have two to three luxury condominiums and there is no rental coming from either and people not wanting to buy, then it seems necessary for owners to give about 25 per cent off the asking price to let go of at least one property.
“But for the buyer, it is a good deal. So, I wouldn’t say the property market is crashing because there is still a willing buyer for a willing price tag,” Geh who represents the Malaysian chapter of the International Real Estate Federation told Malay Mail Online.
Geh likened the situation to the English folklore Robin Hood, noting that the rich would not like the current situation while the “poor” would be happy being at the receiving end.
Property agents here told Malay Mail Online that luxury home or commercial unit owners were willing to shave between 20 to 30 per cent off property prices to seal a deal.
This is supported by data from National Property Information Centre (NAPIC), which showed a general decline in transactions within the luxury home segment.
From the second quarter to the third quarter of 2016, total transactions dropped from 2,014 to 1,826 — a 9.3 per cent decline.
The same was seen with high-end commercial properties that fell 10 per cent in the same period.
When contacted, property consultancy firm Knight Frank managing director Sarkunan Subramaniam pointed out that 2017 is a good year to buy property.
“The market now has seriously bottomed out and we anticipate the market to recover by the end of this year. Hence we believe this year would be the best year to buy property,” he said.
Based on a second half property market report for 2016, Sarkunan said there were still launches and previews of luxury condominiums and thus concurred with Geh on the “willing buyer, willing seller” scenario.
Statistics by NAPIC revealed that Kuala Lumpur, Penang and Johor were among the states that have been hit the hardest in the luxury property market segment.
In Johor, Iskandar Regional Development Authority (IRDA) noted that the housing market was highly segmented from the low-end to the uxurious.
“There may be a slowdown in demand for the high end landed segment but, the supply is also not as superfluous as that of serviced apartments,” IRDA said in a statement responding to Malay Mail Online.
It said demand for affordable and low-cost properties were not met in the southern part of the Peninsular.
“Even now, there is a dearth of housing in the price bracket of RM150,000 to RM450,000 which the majority (about 50 per cent) of the population can afford,” it said.
According to data from NAPIC on residential homes in the city valued at over RM1 million, unsold units increased by over nine per cent from the first quarter of 2014 to the same period a year later.
Cumulatively, this is equivalent to RM158 million worth of surplus units in the luxury home segment, based on figures from the first quarter comparison alone. Figures for subsequent quarters are not yet available.