KUALA LUMPUR: The year ends on yet another gloomy note for the Malaysian property market as both the residential and commercial segments saw an extension of the downward purchasing momentum from 2015.

Past President of the Malaysian Institute of Estate Agents (MIEA) Siva Shanker opined that the property market had reached the bottom of its cycle in 2016 after being in a slowdown mode since 2012.

“In 2013, we saw the number of transactions fall, but with the value still going up. In 2014, we saw a slight increase in value, but unfortunately, the improvement did not carry through to 2015.

“In my opinion, the property market will end the year on a weak note,” he told Bernama.

As property is a long-term investment, people who get caught in the cycle are the ones trying to be short-term investors or also labelled as “property-flippers”.

A key reason for the lower purchasing activity in the industry is the difficulty in obtaining housing loans from financial institutions.

As revealed by the National Property Information Centre (NAPIC) in its Property Market Report for the first half of 2016, the ratio of loan approvals against applications shrunk to a low 40%. It was also the lowest recorded in a six-year period.

Property buyers seemed to be burdened by the rising prices of residential and commercial buildings against the background of a weaker economy.

It was noted that the Malaysian House Price Index continued to improve moderately in the second quarter of 2016 at 235.4 points, up 5.3%.

The same goes for commercial buildings, whereby prices of shop lots continued to strengthen in areas with hype commercial activities and efficient connectivity, in ranging between RM1.2 million and RM2 million for a double-storey unit, depending on locality.

This situation has resulted in a huge property overhang for the year, especially in the residential segment. – Bernama