KUALA LUMPUR: The asking price for real estate is expected to drop further next year due to a more challenging market for property developers, according to findings by online property portal PropertyGuru Group.
PropertyGuru Malaysia country manager Sheldon Fernandez said its Property Price Index showed that the average asking price in the middle of last year was RM586 per sq ft and shifted to RM554 per sq ft to the middle in this year.
The index has predicted the price to drop a further RM35 per sq ft to RM40 per sq ft next year.
“With little supporting factors, next year is likely to show similar downtrend, mired by the unresolved issues of unaffordability in house pricing, high rejection of loan applications and macro-economic issues such as rising living costs and smaller growth in incomes,” he said at the PropertyGuru 2017 Outlook Forum, here, yesterday.
Fernandez said this would be evident in high-rise units where certain segments are facing oversupply.
Houses priced between RM500,000 and RM700,000 are likely to see the most number of loan rejections, which would dampen sales.
“Based on the combined data from the PropertyGuru Property Price Index and official statistics, next year is expected to be another slow year for the property market.
“With the completion of many new developments flooding the market next year, there is likely to be a drop in selling prices due to lack of demand, and some may be motivated to move their units quickly due to their lack of holding power,” he said.
However, Fernandez said given that the property market is influenced by various factors, there was likely to be certain properties, especially landed ones in strategic locations, that would maintain valuations or appreciate marginally.
Besides that, Fernandez said the market would continue to have its bright spots with the rental market expected to remain strong — fuelled by a growing pool of young, aspiring first-time buyers who were deferring their decision.
Certain locations known for their higher end properties may see rentals reduced due to external factors, including an exodus of expats due to the slump in the oil and gas industry.
Bringing together a distinguished panel of industry experts and speakers, the PropertyGuru 2017 Property Outlook Forum provided much-needed insight on the prospects for the Malaysian real estate sector next year.
Real Estate and Housing Developers’ Association Malaysia president Datuk Seri FD Iskandar, Khazanah Research Institute managing director Datuk Charon Wardini Mokhzani, Jones Lang Wootton executive director Prem Kumar, SMART Financing chief executive officer Gary Chua, and CHUR Associates managing partner Chris Tan were the panellists while PropertyGuru Malaysia country manager Sheldon Fernandez moderated the session.