Slowdown in property launches in M'sia

by angie ng

PETALING JAYA: Property launches and sales will soften this year, as the market gravitates towards the actual impact of the 2014 budgetary measures, property consultants concur.

Managing director of property consultancy VPC Alliance Malaysia Sdn Bhd James Wong said with the cooling measures in Budget 2014, sales volumes would drop and the property market would soften, particularly the sales of condominium prices ranging from RM750,000 to RM1mil, which are targeted at foreigners.

He said property launches were expected to slow down compared with 2013 and some launches might even be delayed or scaled down, if effective demand was not there.

Wong expected more affordable homes to be introduced this year, with properties near the proposed mass rapid transit and light rail transit extension lines set to be popular.

“Although the landed residential sector is expected to be resilient with stable growth, especially property within gated and guarded enclaves, sales of residential properties to foreigners would be slow as a result of the budget measures. Transactions in condominiums would slow down, with a possible price correction.

“The abolition of the developer interest-bearing scheme (DIBS) and other freebies is expected to reduce the volume and value of the transactions in the primary market, and new property launches may be affected, as without the DIBS, many potential housebuyers may not be qualified to purchase houses. Overall, the housing market would moderate, with a reduction in property transactions and prices,” Wong said.

According to CB Richard Ellis Malaysia executive director Paul Khong, the minimum RM1mil limit for foreigners would affect the mid-range residential sector, and potential buyers would tend to defer their decision to buy. The imposition of the full real property gains tax will have a blanket effect on curbing speculation across all sectors and impact the take-up rate.

“It has been a quiet start this year and most developers are deferring their launches till the later part. With the Chinese New Year coming up end-January, it is traditionally a quiet period for the property sector. More project launches are expected to come through in or after the second quarter,” Khong observed.

After a relatively quiet first-half and the market finding its equilibrium, he said more action was expected in the second half of the year.

He pointed out that developers would have to work harder this year to attract sales, and many might consider marketing their projects overseas and incorporating innovative and lifestyle concepts into their projects.

“Good and innovative packages plus value-for-money features in property projects would go far in 2014,” Khong conceded.

He said one of the property hotspots would be Medini@Iskandar where new projects like I Medini Walk (by Singapore’s Tang Group of Companies) and Avira (Eastern & Oriental Bhd) both near Legoland would be entering the market soon.

Many developers will be looking at the Medini area, as it is a special international zone with various taxes/benefits, including an exemption of the RM1mil minimum price limit imposed on foreigners.

Read it all here:
http://www.thestar.com.my/Business/Busines...dget-this-year/

And here:

http://www.thestar.com.my/Business/Busines...14-to-be-tough/


Cautiously optimistic outlook with property developers in Iskandar expecting tough 2014

by zazali musa


JOHOR BARU: The “feel-good” factor that was prevalent in 2012 and 2013 for the property market in Iskander Malaysia is unlikely to continue this year following property cooling measures introduced by the Government in the last quarter of last year.

Property developers are rather cautiously optimistic on the market outlook for 2014 and are anticipating it to be a tough year for many.

Johor Real Estate and Housing Developers Association (Rehda) branch chairman Koh Moo Hing said the Year of the Horse would be more challenging and that developers must be well-prepared to face the worst.

“I assume that many of our members will adopt the wait-and-see approach in the first-quarter of 2014, to see the real impact from the (property cooling) measures,’’ Koh told StarBiz.

He said the measures were not something new as other countries would also resort to similar measures to ensure locals were not sidelined and denied from owning houses.

Koh said 2013 was the best year for 30 odd members of Johor Rehda who participated in the Malaysian Property Exposition (Mapex) held here in May and November.

He said these members raked in a combined RM3bil in sales over a one-month period.

“It would an achievement if they could repeat the sales figure again for this year’s events,” he added.

The 30-day period starting from the first day of Mapex is the benchmark used by Rehda to determine the value of sales by participating developers.

“Johor Mapex to be held in April will give a clearer picture on the Iskandar property outlook and how developers are coping with the uncertainties and challenges,’’ said Koh.

He said developers would be ready to face the tough year ahead and adapt well as they had experienced the ups and downs in the industry over the years and emerged stronger. Koh said that speculators would be phased out gradually from the property market with the implementation of the measures with owner-occupier buyers dominating the market. “This year’s launches will see between 100 and 200 units with more developers opting for landed houses as demand for them is still strong in Iskandar,’’ he said.

KGV International Property Consultants (M) Sdn Bhd director Samuel Tan Wee Cheng concurred with Koh that the market would see more serious buyers.

But he said buyers would be more cautious on the new policies – the real property gains tax (RPGT) and the hike in ceiling price from RM500,000 to RM1mil for foreign property buyers.

“Prices of houses will continue to go up this year, determined by the policies and escalating costs of labour and building materials,’’ said Tan.

He said it was matter of time buyers especially first-time house owners decided whether to continue waiting or make the kill before the prices move up north.

Tan said if the prices continued to go up, more buyers would go for the secondary market where prices were between 20% and 30% cheaper compared with new launches.

“For instance, the average selling price for a new double-storey link house in Iskandar is RM800,000 per unit, but if you look around in the secondary market, you’ll be paying RM600,000 for it,’’ he said.

Tan said landed houses in the secondary market came with generous land size and bigger floor area plus ready amenities and facilities within the neighbourhood or the development.

He said if this could prompt developers to lower the selling prices of their new launches to attract potential buyers and also offer no-frills houses to cut costs.

Tan said foreign buyers would continue to buy properties in Medini, Nusajaya as there was no restriction to foreign ownership in the area and they were not subject to the RPGT regime.

SP Setia Bhd divisional general manager Hoe Mee Ling said many uncertainties in both global and domestic market might affect the property market in the first-half of 2014.

She said among the issues were the pressure of increasing costs as a result of skilled labour shortage, reduction in subsidies beginning with petrol last September and electricity tariff adjustment in 2014 and policy changes.

“However, challenges always come with opportunities and there are still positive factors in the Iskandar property market,’’ said Hoe.

She said the fundamental demand for properties in Iskandar would remain high and strong as long as developers could adapt to their products to suit this demand.

Hoe said the outlook was still good as properties fetched good yields and were the best hedge against inflation.

Good info...

"got price no market"?

Means dreaming?

More and more DDD news surfacing...


Property market to cool down: MIEA

Jan 15, 2014 - PropertyGuru.com.my

Malaysia’s real estate sector is expected to rebound in 2016, but it will need at least two years to get accustomed to the various cooling measures that took effect in January, according to the Malaysian Institute of Estate Agents President Siva Shanker.

“The market ground to a standstill after Budget 2014. There was a knee-jerk reaction in sales. It will probably stay in the doldrums for the first half of 2014. The second half may be better,” said Shanker, who is also CEO of real estate consultancy PPC International Sdn Bhd.

Nevertheless, he believes that the new property curbs have effectively curtailed rampant speculation.

“The days of 20 to 40 percent appreciation in property prices after only a few years are over. It is no more a joy to speculate.”

Another positive thing he noticed is that the secondary market is making a comeback due to its more affordable prices. For example, units at a newly-launched project in Bangsar is selling for RM1,500 psf, while the price range of an existing home is just RM800 to RM1,00 psf.

Meanwhile, CIMB Research is more optimistic. It believes that demand for houses will gradually return in 2H 2013, when buyers realise that a correction is unlikely due to prevailing market forces. Instead of price drops, the subsidy cuts and the inflationary pressure of the upcoming goods and services tax will result in higher property values.

“As these macro prudential and policy measures are meant to curb speculation and not restrain genuine demand, the impact (though negative in the short term) should be positive over the longer run because they should help to remove froth from some segments of the market.”

“Also, affordability remains close to its highest ever. Robust sales by developers should provide impetus for a re-rating of property stocks,” added CIMB.

Read it all here:
http://www.propertyguru.com.my/en/property...m_content=links