Residential Property Value to Drop This Year

Posted on: 2016-01-13


KUALA LUMPUR: Transactions within the residential property sub-sector is likely to see flattish growth in 2016 as buyer sentiment continues to remain subdued this year.

CH Williams Talhar & Wong’s (WTW) managing director Foo Gee Jen (pic) said he expected to see a drop in residential property value and transaction volume this year compared with 2015.

“Going into 2016, we see headwinds and home buyers will remain cautious. There is also uncertainty in the job market, which will be a deterrent,” he said during the launch of the firm’s 2016 Property Market report yesterday.

Foo, however, said demand for residential property in established areas will continue to remain healthy.

“We see the secondary property market being more aggressive versus the primary market but it will not be as active as it was compared with two to three years back.”

For the high-rise residential sub-sector, Foo said there was a mismatch of supply and demand, especially within the Klang Valley.

“Yes there is demand for high-rise units but there is a high supply of shoebox units. These might take a long time to fill, perhaps a year or longer,” he said.

Sometimes called Mickey Mouse units, industry players have been defining any apartment under 500 sq ft as a shoebox unit.

For the office sub-sector, Foo observed that 2015 saw a number of firms consolidating their space requirement or even downsizing. This was especially for the oil and gas (O&G) players affected by the falling oil prices.

However, Foo emphasised that the impact on the office sector would be minimal as O&G players only made up a small portion of tenants.

“Yes, the O&G sector will have some impact this year on tenancies, but in the second half of 2016 we expect to see some improvements.”

With the falling ringgit, Foo also said he expected to see more institutional than retail buyers investing in local properties.

“In the third quarter of last year, we saw some Japanese investors coming in. Even though rental yields for office space have been suppressed over the years, it’s still better than a lot of countries in the region.”

Only the industrial sub-sector, Foo pointed out, would continue to register positive growth.

“We are looking at the fringes of the Klang Valley, where in places such as Shah Alam, Port Klang, Rawang and Kajang, there is growth for industrial support services.”

“Malls in not-so-popular locations will find it difficult to conduct business,” Foo said, adding that malls totalling 2.05 million sq ft of space entered the Klang Valley market last year.

He, however, added that the increasing demand by the young and affluent urban population as well as tourists would help maintain retail malls’ performance within Kuala Lumpur, especially the KLCC and Bukit Bintang areas.


Share:

Source From: The Star

Other News & Articles


Bajet 2019, perumahan untuk semua!

Baru-baru ini Bajet 2019 telah diumumkan dengan matlamat kerajaan bagi meningkatkan pemilikan rumah sendiri bagi golongan B40 dan juga M40....

Posted on: 2019-04-12

Nilai hartanah di Pasir Gudang dijangka pulih

Nilai hartanah di kawasan Pasir Gudang dijangka pulih dalam tempoh setahun bergantung kepada sentimen masyarakat....

Posted on: 2019-04-12

3 Main Reasons Malaysians Are Not Able To Buy A Home Yet

Buying a home to call your own is one of the biggest financial challenges that you’d face nowadays. But when looking at the problem, there are in fact three major obstacles that prevent Malaysians from successfully purchasing a property....

Posted on: 2019-03-29