12 February, KUALA LUMPUR – The Malaysian property market is expected to be stable this year after showing signs of bottoming out with the trough, said property consultant Rahim & Co International Sdn Bhd.
Its executive chairman, Tan Sri Abdul Rahim Abdul Rahman said although the market did not show much improvement in transactional activity from the downtrend that was seen since 2013, the pace of the property market slowdown had decelerated.
Moving forward, he said, standing on solid foundation with a growing and young population backed by strong economic fundamentals, the local property market’s transition to expansion could happen by 2020.
“Our economic fundamentals are good, oil prices have stabilised, our GDP has grown, investment from overseas are coming ….and we are politically stable, comparatively.
“We do not expect the property market this year to be much worse off than in 2017. Expect it to be stable this year, and given another two years, it could pick up more,” he told Bernama after the official release of the company’s annual publication, ‘Rahim & Co Research: Property Market Review 2017/2018’, here, today.
Based on the report, the industrial sector is expected to see a rise in demand as the proliferation of e-commerce is anticipated to place properties within this segment under the radar of many logistics and warehousing players.
However, oversupply concerns on the commercial sector continue to lurk as Klang Valley’s in-coming new supply of sizes of nearly 18 million square feet for the retail segment, and up to 20 million square feet for the office segment, are expected to add on to the existing market in the next three to five years from now.
Klang Valley already has a total of 69.8 million square feet of retail space as of 2017 — comprising of 32.9 million square feet in Kuala Lumpur and 36.9 million square feet in Selangor — with an average occupancy rate of 85.2 percent. Meanwhile, there was a total of 5 million sq ft of retail space that was vacant in Kuala Lumpur in the first half of last year.
Meanwhile, the largest market sector, the residential property sector, is expected to see more units within the “affordable range” according to the location of the properties, as many developers are shifting their focus to this segment.
Residential products within the price bracket of RM250,000 to RM500,000 are performing well in the market, especially for middle-income earners in urban areas, depending on the location, concept, quality, and type and size of the offerings.
Abdul Rahim shared that the federal government had been doing all it could and had been trying its best to add on the supply of affordable housing.
“The trouble with housing is, land is a state matter. It must be the state that has to initiate the affordable housing effort in certain states like Selangor and Penang.
“Maybe the government should impose a land acquisition act, even on private land, in order to help build affordable homes at certain locations,” he suggested.
He said affordable housing needed to be built at the right location with a feasibility study to identify a suitable development concept to attract buyers.
“The government can also consider to continue the imposition of certain percentage, say 30 per cent of new residential development, for products within the price bracket of affordable housing,” he added.
The report also states that the government’s cooling measures and responsible financing guidelines which have been in place for the past few years, have helped moderate the spiralling price growth in recent years to a more sustainable five per cent to 7.5 per cent and may have mitigated unwanted risks towards any non-performing loan issues.