By Khairie Hisyam
Property consultancy CH Williams Talhar & Wong (WTW) expects the Malaysian property mart overall to remain flat this year as economic turbulence shake sentiment in several areas across Malaysia.
Data compiled by WTW indicated a flat year for most major areas in 2015 including the Klang Valley, Penang island, Johor Bahru and Kota Kinabalu with some bullishness in Seberang Perai, Alor Setar and Seremban.
However the consultancy does not expect bullish sentiment to drive the market in any specific area in 2016.
“We are looking at a very flat outlook for the entire nation,” said managing director Foo Gee Jen this morning, adding that the bullishness seen driving Seberang Perai and Alor Setar in 2015 was likely due to land abundance while Seremban was benefiting from demand spillover from the Klang Valley.
In addition some areas such as Sibu and Miri would likely see some cooling due to global slowdown in the oil and gas sector, which is a significant economic driver in these locales.
Sandakan and Lahad Datu markets however would likely remain bearish due to lingering effects on sentiment from the invasion of Sulu loyalists several years ago, said Foo. This is exacerbated by security concerns due to recent earthquakes in Ranau and kidnapping near Sabah’s eastern coast.
Foo was speaking at the launch of WTW’s Property Market Report 2016 in Kuala Lumpur today.
Expectations of a subdued market this year comes as various macroprudential measures introduced by the government remain in place, with the effect of cooling down what was seen as runaway price surges in the years following the 2008 global financial crisis.
Among others these include the implementation of loan-to-value (LTV) ratio capping property financing to 70% of purchase price for third residential property buys onwards; an upward revision of real property gains tax (RPGT) as well as the prohibition of controversial developer interest-bearing scheme (DIBS).
Some of the measures have aimed at curbing speculative purchases that was seen as contributing towards unsustainable house price increases such as a loan-to-value restriction of 70% of property value for buyers purchasing their third property onwards.
These measures have arrested house price growth rates in 2014, said Bank Negara Malaysia in its Financial Stability and Payment Systems Report 2014, citing a run of three consecutive quarters of slowing house price growth rates that was expected to extend into the fourth quarter of 2014.
Full-year figures from the National Property Information Centre (Napic), the valuation arm of the Ministry of Finance, indicate that total property transactions recorded nationwide across all segments dropped for two consecutive years in 2012 and 2013 after double-digit percentage growth rates in several years prior.
Transaction picked up in 2014, according to data released in April 2015.
Napic’s full-year statistics for 2015 are expected to be released in April 2016.
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