Property Market Still Promising

Posted on: 2016-01-26


PETALING JAYA: The medium-term prospects for the Malaysian property market still looks promising, despite the challenging headwinds ahead.

Independent economist Lee Heng Guie said that while property prices would be easing further, a sharp fall in property prices would be unlikely.

“This is because Malaysia is not heading for an economic recession,” he said during a presentation at the 9th Malaysian Property Summit last week.

“The softening property market renders the buyers the opportunity to purchase property. For foreigners looking to invest in real estate in Malaysia, the weaker ringgit comes as a boon,” he said.

Lee said the local property market was still hampered by affordability issues, weak economic growth as well as cautious sentiment.

“The prospects of higher domestic interest rates in 2017 may be a dampening factor.

“Likewise, the banks are expected to maintain vigilance in the evaluation of property loans while ensuring the good credit-worthy borrowers will continue accessing to home financing.”

Lee said he hoped that the property cooling measures would stay for now.

“The right time to adjust some of the measures is when the market equilibrium is a lot more certain and sustainable. An over-adjustment of the property sector must be avoided for now.”

He added that the authorities should monitor closely the supply and demand conditions to avoid over-building in some segments, as well as prevent systemic risk to the banking sector, in an event of a severe correction in property prices and prolonged economic slowdown.

“While ensuring a sustainable property sector, Bank Negara should ensure the banking institutions continue to lend to those eligible borrowers.

“Fiscal incentives such as stamp duty relief and developers’ interest bearing schemes should consider for the first time home buyer and for the property priced below RM1mil,” Lee said.


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Source From: The Star

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