PROPERTIES in certain market segments and locations are coming under increased pressure amid an oversupply situation.
PropertyGuru Malaysia country manager Sheldon Fernandez said sellers continue to offer discounts on property prices to secure buyers.
Some are also opting to sell as rental rates have come under pressure due to a lot of choices available in key areas, he said.
“With more supply, one can decrease rental rates but if that is not feasible, the usual option is to sell to unlock the gains,” he said.
According to the PropertyGuru Market Index (PMI), the asking prices of houses in key property epicentres — Kuala Lumpur, Selangor, Johor and Penang — continue to drop.
Kuala Lumpur saw the largest drop, at 3.2 per cent compared to the previous quarter, followed by Johor at 3.3 per cent, Selangor at 1.8 per cent and Penang at 1.3 per cent.
On an annual basis, Selangor recorded the highest yearly decrement with 2.4 per cent, followed by Johor at 2.3 per cent, Penang at 0.7 per cent and Kuala Lumpur at 0.5 per cent.
The PMI showed that the asking prices for houses in other states also continue to decline.
The PMI report is derived from PropertyGuru’s proprietary data, which includes the asking prices of over 250,000 residential property listings on its real estate portal.
It revealed that asking prices by real estate developers and individual owners nationwide declined 2.5 per cent year-on-year in the third quarter of 2018 (Q3 2018), or a 1.8 per cent decline from the preceding quarter.
Fernandez said properties in all regional markets except Johor continue to show a discount to their 2015 base prices.
“Johor continues to maintain an upward trendline, but it remains to be seen if the trend will persist going into the fourth quarter of 2018 and into 2019,” he said.
Fernandez said the present downward price trend may not be due to sellers reducing prices, but also to overall value provided to reduce ownership cost.
“Beyond absolute pricing, there are other factors, such as developers throwing in freebies like furnishing and decor, carparks, or even rebates.
Cumulatively, these incentives, reduce the overall cost of ownership which will have a knockdown effect on prices,” he said.
DEVELOPERS LOOK TO BUDGET 2019 FOR IMPROVEMENT
LBS Bina Group Bhd is hoping for better policies in the 2019 Budget that will help first-time house buyers face the current challenges of home ownership.
Group managing director Tan Sri Lim Hock San said LBS remained committed to helping people realise their dreams of owning a home by providing more affordable units.
“Our experience in the property development industry has allowed LBS the opportunity to understand the evolving needs of house buyers.”
Lim hopes that its suggestions for the 2019 Budget would help empower house buyers and increase home ownership.
LBS is proposing the introduction of a special end-financing scheme to enable more buyers obtain home loans.
The company also hopes to see more flexible end financing guidelines with the support of Bank Negara Malaysia.
“This will greatly empower first-time buyers’ financing capacity and bring them closer towards realising their dream of owning a home,” said Lim.
He said the government should also consider increasing the tenure of housing loans to 40 years from 35 years currently.
The administration should also look at stamp duty exemption on loan agreements involving properties under RM500,000andconsidergreater flexibility in housing loan policies.
“We have encountered many interested house buyers who experienced either loan rejection or were only eligible for lower-than-expected loans. We believe those in the middle- and lower-income groups will benefit from the special end-financing scheme as it could eases their financial burden,” added Lim.