KUALA LUMPUR, FEB 4 – Rahim & Co International Sdn Bhd released their annual publication entitled ‘Property Market Review 2015/2016’ today. The publication includes a market overview of selected property sectors such as residential, retail, office, hotel and industrial properties across Malaysia. The press conference highlighted the issues related to the Malaysian property market and the prospects for this year amidst the challenging economic condition.
The property consultant firm highlighted that 2015 had been a challenging year with the rising costs of living, worsening scenario of crude oil and commodity prices as well as the depreciating Ringgit – causing volatile economic conditions and depressed consumer sentiments across the country.
The Malaysian economic performance, measured by Gross Domestic Product (GDP) growth was at 6% growth in 2014 but slowed down to 4.7% in Q3 2015.
The Malaysian Institute of Economic Research’s recently released Consumer Sentiment Index pointed out a new low of 63.8 for Q4 2015. Considering the challenges in the environment, the market has generally been cautious.
The Property Market Review 2015/2016 reported that the total number of property transactions in 1H 2015 was recorded at 186,661, a drop of 3.5% as compared to 1H 2014 with 194,405 transactions. Meanwhile, the total transaction value also experienced decline by 6.6% to RM76.6 billion.
“This declining trend has spanned over 1.5 years since 2H 2013. Despite the slowdown of total property transactions nationwide, average property prices are appreciating, but at a slower pace compared to the past 2 to 3 years,” said Sulaiman Akhmady, Director of Research and Strategic Planning of Rahim & Co.
The subdued activity is expected to continue throughout this year.
Rahim & Co also highlighted in view of the Budget 2016 announced last October 2015, there were neither cooling measures nor market boosters such as reduction in RPGT and reintroduction of DIBS made by the Government.
“We felt that the minimal-intervention stand by the Government in the property sector was appropriate as the market should correct itself based on the open market and its available liquidity, especially for those selling at normal price within the middle to upper range houses,” said Senator Tan Sri Dato’ Abdul Rahim Abdul Rahman, Executive Chairman of Rahim & Co.
“The market should find its own natural equilibrium as it should go down to the fundamentals of supply and demand,” he added.
Last week, Prime Minister Datuk Seri Najib Tun Razak announced the recalibrated Budget 2016 which is expected to save the Government over RM9 billion in operating and development expenditures.
“The recalibration was more focused on easing the rakyat’s burden on daily costs of living as well as broadening and increasing the efficiency of government revenue sources and collection,” Tan Sri Dato’ Abdul Rahim commented.
Responding to the new policy introduced by the Government to limit houses priced up to RM300,000 for only first-time house buyers, Tan Sri Dato’ Abdul Rahim noted that this move will be beneficial for the younger generation.
“This move will further encourage home ownership among Malaysians as well as to discourage speculative activities in the property market. However, there must be a clearer definition for a clearer guideline on this matter as this new policy is still quite vague,” he elaborated.
The Budget 2016 recalibration also highlighted that the GDP growth forecast for this year had been toned down to between 4 – 4.5% from the initial forecast of 4 – 5%.
“Even though the economic situation is expected to be challenging, growth enablers such as major infrastructure projects and initiatives that were announced in the Budget 2016 will continue,” Tan Sri Dato’ Abdul Rahim enthused.
“The property market is expected to be challenging with moderate activity this year. Prices are still expected to rise but more marginal for the residential sector. The market will remain cautious whereby buyers are definitely becoming more discerning in their purchases across all sectors,” explained Tan Sri Dato’ Abdul Rahim.