Property developers advised to address demand for affordable housing

Property developers will do well to pick up on market demand for residential properties ranging between RM200,000 and RM500,000.

“Looking at the statistics, I’m sure property players will know how to respond to market needs for affordable housing this year,” Deputy Finance Minister Datuk Chua Tee Yong told the press at the launch of the Malaysian Property Market 2014 report.

He said residential property transactions were expected to register some growth in 2015 although the total value may be less.

He said this was because many buyers were looking at residential units below RM500,000 in a market where many residential properties priced over RM1mil per unit were launched last year.

According to the report, residential properties priced RM200,000 and below as well as RM200,000 to RM500,000 recorded quite similar market share, each with 43.1% and 41.3%, respectively.

Residential property continued to drive the national property market, accounting for 64.4% and 50.4% of the volume and value, respectively.

Selangor, Johor and Perak remained the three leading states in the residential segment, each with 24.6%, 15.8% and 11% market share.

“In 2014, both property transactions and value were up, however, the public was cautious in the months leading up to the implementation of the Goods and Services Tax (GST),” Chua said.

According to the report, the Malaysian economic growth was at 6% in 2014, higher than the 4.7% registered in 2013, supported by the slight increase in the property sector, which grew at a marginal 0.8% in market volume and 13.5% in market value.

Chua said market activity in the last two years led to cooling measures such as the imposition of higher Real Property Gains Tax to control market speculation.

Transaction volume for the first quarter of 2014 (Q1’14), Q4’14 and Q1’15 were 92,900, 94,500 and 88,600, respectively valued at RM40bil, RM38.6bil and RM38.5bil respectively.

“In view of the GST , we are expecting these months to be an adjustment period as consumers spend cautiously, not just on property but on consumer goods as well,” Chua said.

“Overall, we are still positive on the property market this year in spite of the low employment rate.”

Overall, the performance of the property market was a marginal rebound from 10.9% contraction recorded in 2013.

A total of 384,060 transactions worth RM162.97bil were recorded, indicating a marginal increase of 0.7 in volume and 7% in value, the report said. - By The Star