SUBANG JAYA: The ongoing slowdown in the local property sector could see transactions in the secondary property market overtaking that of the primary market.
Citing data from the National Property Information Centre (Napic), PPC International Sdn Bhd managing director Datuk Siders Sittampalam said the economic slowdown has affected transactions in the primary property market this year.
'Total volume of transactions in the primary market has dropped, and this has also resulted in values dropping.
'As such, there will come a time when the secondary market will lead the primary market,' he said at a press conference after the launch of the 25th National Real Estate Convention (NREC) 2015 yesterday.
Siders said it was difficult to provide a specific timeline on when he expected transactions in the secondary market to exceed that of the primary market.
'In terms of value, the primary market will find it harder to match the secondary market due to rising land and building costs,' he said.
Siders said he expected transactions in the primary market to improve once cooling measures imposed on the local property sector have been relaxed.
'Once the economy picks up and Bank Negara backs off on its cooling measures, the primary market will pick up again.'
He also said a drastic hike in interest rates will have an impact on the property sector.
'Over the last few years, the property market had been steadily growing due to various measures such as the developers interest bearing scheme (DIBS). Because of these measures, pricing in the market has been distorted.
'Now, when people have committed to their loans, especially youths and first time buyers, and there is a sudden hike in interest rates, there will be a dip in the market.
'Loans go bad and many properties will go under the hammer. This will not be a healthy market.' Siders said he was hopeful that any interest rate hike by the central bank would be a 'sustainable increase.'
Bank Negara maintained its overnight policy rate in September at 3.25%.
The NREC was organised by the Royal Institution of Surveyors Malaysia and the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia.
The event highlighted major concerns for the future of the real estate industry in Malaysia during the current economic period.