BAD property market Malaysia, a summary

Articles with negative titles these days are becoming ever more popular. This is despite the fact that the content does not correspond fully to the title. One such article caught my attention and if we read just the title, it’s best we sell properties we have now and wait for opportunities down the road. As the article was quite a long one, based on the findings and analysis from UOBKayHian Research, I will summarise them as below.
 
– H1 2016 will be bleak due to the focus on affordability and strict bank lending.
– property prices remained stable in key areas including Penang, Johor and the Klang Valley
– many developers have downsized their launches and focusing on affordable homes instead.
– Selected hotspots in Klang Valley offering affordable and landed developments would be well sought after.
– It likes Sunway and SP Setia, as both are expected to give 4-6% dividends while Sunsuria offers upside where earnings may spike but ONLY for those with a stronger risk appetite.
– Johor has the highest positive quarter-on-quarter growth after three quarters of decline from all the cooling measures
– Malaysia’s key economic growth areas remained stable and still growing even if at a slower pace.
– Prices in Johor City Centre would face downward pressure, particularly within the Danga Bay area. Huge quantities of new units from the Chinese developers would flood the market in 2018.
– Newly completed units in Penang are increasing, especially for those launched in 2012 – 2013 previously. New launches have slowed considerably as developers were not able to obtain their advertising and developers licences.
I think the summary would tell us that it’s time to hold, if we own properties and can hold and it’s time to ‘negotiate harder’ if we are the buyers. For those of us who needs a more affordable home, there are lots of choices. For those who bought Johor properties with delivery dates in 2018, it will be a tough time. Of course, it boils down to the price paid, the developer’s brand name and concept and the location too. Be real, for a great location, prices are very sticky. Any sudden fall of 10 percent and many buyers would already offer to buy. If you must read the full article, it’s here: Bleak Property Outlook in H1 2016  Happy investing.
written on 17 Feb 2016
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