THE property market is expected to rebound in the second and third quarters after bottoming out in 2018, said an analyst.
“Those who want to pick up bargains should act fast,” said SwhengTee International Real Estate Investors Club chairman Gavin Tee.
Tee said the current prices are at rock bottom because of oversupply in the Malaysian housing market.
In such a scenario, development will be reduced and previously unsold units slowly taken up, prices will rise again because of the higher demand, he said.
“Based on my research, Malaysia’s real estate market has been in an unstable situation since 2016. In some areas, there has been an oversupply of real estate and prices have fallen.
“I have also found that real estate in many places in Malaysia is at its lowest level, that is, in terms of house price, construction cost and the surrounding economy, it is already at the lowest level. After property reaches this lowest point, unless the national economy collapses, it will definitely rebound,” Tee told The Malaysian Insight recently.
Developers have also started dropping prices of unsold units to offset losses, he said.
The Malaysian Insight reported that developers eager to recoup their capital and offset losses are now slashing the price of unsold homes, as recent data showed a worsening of the property glut in Malaysia.
Radzi Tajuddin, chief executive officer of Hartabumi, a real estate portal for Bumiputera lots in the Klang Valley, said instead of waiting for the situation and economy to improve, developers are taking proactive steps to reduce the prices of unsold units.
“Developers need to slash prices seeing as the market is challenging. Housing units are increasing, whereas household incomes have not increased by much.
“So, the only step they can take is to reduce prices,” he told The Malaysian Insight.
Statistics from the Valuation and Property Services Department (JPPH) revealed that unsold property nationwide was estimated at RM19.54 billion, a leap of 56.44% from the RM12.49 billion last year.
As of September last year, the number of completed and unsold residential units totalled 30,115 – an increase of 48.35% from the 20,304 units in 2017.
Tee said in the first half of 2019, the local housing market will basically remain the same, because of the many new economic projects or policies of the new government in the second half of the year.
Recovery takes time, he said.
“After the domestic house prices rebound in the second or third quarter of next year (2019), the real market recovery will be in 2020.”
He also advised investors to understand what determines housing prices.
“For example, the current price of a house may be 10% higher than the market price, but the future room for growth is also large.”
In addition, Tee said rental affects property prices, especially in the commercial sector.